- EUR/USD remains fragile near weekly lows.
- Italy’s PM Conte criticised Lega’s no-confidence motion.
- Attention stays on FOMC minutes and Powell’s speech.
EUR/USD is now meandering the 1.1070/80 area as the speech by PM M.Conte before the Senate is under way.
EUR/USD remains unable to pick up pace
The downtrend in the pair looks unabated so far today against the backdrop of increasing cautiousness ahead of the publication of the FOMC minutes on Wednesday and the speech by Chief J.Powell at the Jackson Hole Symposium on Friday.
EUR stays vigilant as well on political developments in Italy, where PM M.Conte said the Lega’s decision to present a ‘no-confidence’ motion will have consequences for the country and will likely prevent the budget to be passed in time. Conte also argued that the VAT would likely be raised.
Earlier in the euro-docket, German Producer Prices rose 0.1% on a month to July and 1.1% from a year earlier.
What to look for around EUR
EUR has finally succumbed to the downside pressure and is extending the recent breakdown of the 1.1100 handle on the back of shrinking ‘repatriation’ forces, renewed buying interest surrounding the buck and expectations of ECB easing. That said, sustained bullish attempts in the pair still look flimsy amidst ECB’s preparations for a fresh wave of monetary stimulus (most likely to be announced in September), including a potential reduction of interest rates, the re-start of the QE programme and a probable tiered deposit rate system. This scenario has been confirmed as of late following poor results from the euro-docket, adding to the unremitting deterioration of the economic outlook in the region. On another front, Italian politics has resurfaced as a source of uncertainty as of late and is expected to weigh on the sentiment sooner rather than later.
EUR/USD levels to watch
At the moment, the pair is up 0.03% at 1.1080 and a break above 1.1141 (21-day SMA) would target 1.1224 (55-day SMA) en route to 1.1282 (high Jul.19). On the flip side, the next down barrier aligns at 1.1066 (low Aug.16) seconded by 1.1026 (2019 low Aug.1) and finally 1.0839 (monthly low May 11 2017).
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.