Forex: EUR/USD remains capped by 1.3125

The euro trades firmer versus the dollar on Wednesday although it has been largely confined to yesterday's range as market continues to assess the outcome of Italian elections. The fact that Italian yields rose at an auction highlight the political stalemate, even though for euro investors this was offset in part by better-than-expected confidence survey.

EUR/USD managed to climb back above the 1.3100 level and hit an intraday high of 1.3121 before pausing, just at the same level it found resistance on Tuesday . At time of writing, the pair is trading around 1.3105, still up 0.4% on the day, but not so far away from its 7-week low of 1.3017 scored yesterday.

As for technical levels, the Mataf.net team locates next resistance levels at 1.3125, 1.3195 and 1.3245, while they see supports at 1.3070, 1.3020 and 1.2960.

Investors will be looking ahead US Federal Reserve Chairman Ben Bernanke's testimony to the House Financial Services Committee.