Forex Flash: Euro vulnerable for longer to the downside - BTMU (Barcelona) - Negotiations in Italy to form a coalition government will likely be held in the week ahead, which according to Bank of Tokyo-Mitsubishi London office, "will leave the euro vulnerable for longer to the downside" although the bank says that "fresh elections are unlikely to be called in the week ahead."

Bank of Tokyo-Mitsubishi UFJ adds: "We expect EUR/USD will find strong support around 1.30 helping to limit scope for further downside. The pair has already fallen sharply during February. In the US, it appears unlikely that a last minute deal will be reached to avert the sequester spending cuts set to begin hitting the US economy 1st March, which may weigh upon the US dollar."