Yahoo Finance EUR/USD Daily Price Forecast – EUR/USD Opens Flat for the Week as Investors Lookout For Italian Budget Updates
EURUSD downside pressure stalled as it saw a bounce off its key support at 1.1531 to close higher on Friday. While that level holds as support it faces the risk of a move further higher nearer term. The EUR/USD pair created a bullish outside-day at the key support of 1.1432 on Friday, signaling the pullback from the Oct. 16 high of 1.1622 has likely ended. A European Union official attempted to ease fear of a clash over Italy’s deficit-expanding budget proposals and provided a strong boost to the shared currency on Friday. Following Thursday’s high profile warning letter, criticizing Italy’s fiscal plans, European Economic Affairs Commissioner Pierre Moscovici said that he wanted to reduce tensions with Italy through a constructive dialogue.
Moody’s Credit Rating For Italy Helped Common Currency Limit Downside Move
The EUR/USD pair managed to find decent support near monthly lows, around the 1.1435-30 region and rallied nearly 100-pips to recover a major part of its weekly losses. The positive momentum was further supported by some renewed US Dollar selling bias, which lost some additional ground after Atlanta Fed President Raphael Bostic said the case of missing Saudi journalist Jamal Khashoggi was a downside risk for the US economy as it could lead to sanctions and impact oil prices. Meanwhile, Moody’s downgrade of Italy’s credit rating to Baa3, a notch above junk status, kept a lid on any further up-move for the major. However, a stable outlook was well received by the market and turned out to be one of the key factors limiting any immediate sharp downside.
There aren’t any major market-moving economic releases due, either from the Euro-zone or the US and hence investors are on lookout for fresh news surrounding Italy’s budgetary plans and Brexit Updates as they could influence the shared currency and provide some impetus today. As of writing this article, the pair is trading near flat at 1.1513 down by 0.01% on the day. As Moody’s decision fell short of investors’ worst expectations, hence, Italian markets may witness a relief rally today. If the spread between the 10-year Italy and German yields will likely drop below 300 basis points (bps), it could lift the EUR/USD pair higher during European market hours. Should the spread remain above 300 bps, then the EUR/USD will likely struggle to move past 1.1535. Expected support and resistance for the pair are at 1.1463, 1.1432, 1.1400 and 1.1535, 1.1575 and 1.1600 respectively.
This article was originally posted on FX Empire
