Forex - EUR/USD off highs on Italy exit polls

The euro eased back from session highs against the dollar on Monday, after exit polls released just after the close of voting indicated that Italy’s center-right party, led by Silvio Berlusconi, won the most votes in the Senate.

EUR/USD pulled back from 1.3318, the pair’s highest since February 20 to hit 1.3242 during U.S. morning trade, still up 0.40% for the day.

The pair was likely to find support at 1.3144, Friday’s low and a six-week low and resistance at 1.3318, the session high.

Initial data showed Italy’s center-right party with 31% of the votes in the Senate race, ahead of the center-left Democratic Party, which received 29.5%. 

Outgoing Prime Minister Mario Monti’s centrist coalition received just 9% of the votes, well below expectations.

Government officials began counting votes after polls closed at 3pm local time and preliminary results were expected by Tuesday.

Elsewhere, the euro trimmed gains against the pound and the yen, withEUR/GBP up 0.89% to 0.8764, down from a session high of 0.8815 andEUR/JPY rising 0.89% to 124.20, off an earlier high of 125.22.

Sterling remained under broad selling pressure after ratings agency Moody’s cut the U.K.’s triple-A sovereign rating by one notch to Aa1 with a stable outlook late Friday, citing a weak outlook for growth and a rising debt burden.

Meanwhile, the yen weakened broadly on Monday following reports that Japanese Prime Minister Shinzo Abe is likely to nominate pro-easing Haruhiko Kuroda for the post of Bank of Japan governor.