EUR/USD consolidates Turkey fears-led slide to 1.1430, US CPI eyed
|- Euro sold-off into mounting fears that Turkey’s currency crises will spread to Europe.
- Downbeat US inflation report could rescue the EUR bulls.
- Turkey’s President Erdogan’s speech next on tap.
The EUR/USD pair is seen consolidating the 100-pips collapse to thirteen-month lows of 1.1432 in the European session, as the bears await Turkey’s Erdogan’s speech and US CPI figures before the next push lower.
The one-big figure sell-off in the common-currency was mainly triggered by the Financial Times (FT) report that cited that the ECB is concerned about the exposure of some European banks to Turkey’s currency crisis, which led to stop losses being hit below the key 1.1508 level. The list of major banks include Spain's BBVA, Italy's Unicredit, and France's BNP Paribas.
Looking ahead, the pair remains exposed to further downside risks and could breach the 1.1400 demand zone should the US CPI figures beat estimates while the EUR may find some temporary reprieve on a disappoint inflation report.
Ahead of the US data, Turkish President Erdogan’s speech due at 1100 GMT could also fuel some fresh volatility around the European currency.
EUR/USD Technical Levels
Yohay Elam, Analyst at FXStreet, notes, “The EUR/USD is below the 50 and 200 Simple Moving Averages. Looking down, the fresh low of 1.1432 is the immediate line of support. Further down, the confluence detector shows an interesting convergence at 1.1370, with 1.1321 further down.The previous 2018 trough of 1.1508 now switches to resistance. 1.1575 support the pair on Thursday and in mid-July. Next up is 1.1620 that capped the pair in recent days.”
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