The demand for the Euro remains subdued as it remains under pressure at the beginning of the week and is now taking EURUSD to the 1.1590/80 band ahead of the opening bell in the Old Continent. Should traders expect further declines?
1 October, OctaFX – Uncertainty around the Italian fiscal sector after the recently announced 2.4% budget deficit continues to weigh on investors’ sentiment today, keeping the shared currency under further pressure and forcing spot to post its fourth session with losses in a row.
Adding to the downbeat sentiment, Italy’s debt sustainability is now under the microscope and could trigger some revisions from credit-rating agencies.
On the other side of the equation, the greenback keeps the bid tone and is looking to consolidate the recent breakout of the 95.00 handle following the Fed’s move on rates and a pick up in US yields.
Euro Under Pressure Below 1.1600
The EURUSD pair was little moved in the Asian session as the previous sharp decline paused at around 1.1594. The current price is below the important support line shown below.
It is also below the 14 and 28-day exponential moving average. It will likely continue the downward movement today. This will depend on the PMI data from Germany and the United States.
Further declines will see it test the 1.1525 level while any upside will see it test the 1.1645 level.
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