EUR/USD Current price: 1.1486
- Tensions between the EU and Italy over the latest budget keep weighing the common currency.
- The macroeconomic calendar will remain scarce on Tuesday, leaving political woes in the center stage.
The greenback appreciated against most of its rivals amid a risk-averse environment, this last, triggered by escalating tensions between the EU and Italy, over the budget approved by this last a couple of weeks ago. The EUR/USD pair fell to a fresh 6-week low of 1.1459, unable, however, to clear the strong static support level, stabilizing in the 1.1480 region later in the day. European equities collapsed to multi-month lows, with banking-related equities leading the slump, as Italian government bond yields surged to over 4-year highs, with Italian Salvini pointing a finger on Brussels for the bonds' sell-off and Deputy PM Di Maio claiming that anti-austerity views will grow stronger across the continent. US indexes opened sharply lower but managed to revert most of their intraday losses ahead of the close.
European data released Monday was quite discouraging, adding pressure on the EUR. The EU Sentix Investor Confidence Index for October fell by more-than-expected, down to 11.4 vs. the previous 12.0 and the expected 11.7. Furthermore, German Industrial Production fell in August 0.3%, vs. an expected advance of 0.4%, while the YoY reading matched markets' expectations with -0.1%. This Tuesday, there will only be some minor data from both economies, which will hardly make it to the price.
The dollar seems poised to extend its advance, as, once the market returns in full fashion, there are good chances that US Treasury yields will skyrocket. The EUR/USD pair 4 hours chart shows that the pair failed to sustain modest gains above a firmly bearish 20 SMA, now offering a dynamic intraday resistance at around 1.1500, as the Momentum maintains its bearish slope below its 100 level, but the RSI indicator stabilized right above oversold readings, amid the limited volume and the lack of follow-through. The 1.1460 price zone is a strong long-term static support, as the pair topped around it multiple times between 2015 and 2017, and won't be easy to break, but if it blows away, the pair has room to extend its slump down to 1.1250.
Support levels: 1.1460 1.1420 1.1475
Resistance levels: 1.1500 1.1530 1.1565
View Live Chart for the EUR/USD
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.