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EUR/USD prints fresh 16-month lows below 1.1240

11/13/2018, 11:27:02 AMMarket Analysis
EUR/USD prints fresh 16-month lows below 1.1240

The EUR/USD pair dropped further during the US session after the recovery found resistance at 1.1280. The euro fell to 1.1234, reaching a fresh low. It was trading around the lows, under pressure. 

The bias points to the downside as the euro remains affected by Brexit concerns and amid mounting tensions regarding Italy’s budget. There are no signals that Italy will present a new budget to the European Commission tomorrow. “Italy may be part of the EU but its budget dispute it treating the #EURUSD like the lira of old. The EUR/USD is down 8.2% against the dollar since Italian election on March 4th and 3.6% since the formation of the current League/5 Star government”, said Joseph Trevisani, Senior Analyst at FXStreet. 

The greenback continues to be among the strongest currencies supported by Federal Reserve rate hike expectations and the negative sentiment around financial markets. Today the DXY rose to the highest level in 17 months above 97.30. 

EUR/USD Technical outlook 

“Technical readings in the 4 hours chart favor a bearish continuation for the upcoming sessions, as indicators in the mentioned chart maintain their downward slopes within oversold readings, while the 20 SMA accelerated below the larger ones far above the current level. The daily low is the immediate support, with a break below it opening doors for a downward continuation to 1.1186, June 2017 monthly low,” explained Valeria Bednarik, Chief Analyst at FXStreet. 

The immediate short-term resistance below daily lows is seen around 1.1275 while Bednarik notes that advances could be considered corrective as long as the price remains now below 1.1335.