EUR/USD: Downside risk still high

by Admin

The Italian disappointment continues weighting on the EUR that visited the 1.3017 level against the USD earlier today. The pair saw some short covering and spiked to 1.3118 but bears continue to lead: price fell back below the 1.3100 mark and sees some consolidation, ahead of US risk factors later today: housing data and Bernanke’s testimony before the Senate Banking Committee. Dollar may come under pressure if the Chairman turns dovish in regards of the economic future of the country, but seems unlikely.

In the meantime, the EUR/USD maintains the bearish tone, and renewed selling pressure below 1.3050 area, may see the pair retesting daily lows, with scope to extend the slide up to 1.2980 today. The upside should remain capped by 1.3140/50 area, where sellers are expected to jump in. Steady gains above this last however, will expose the 1.3200/20 price zone.  

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