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EUR/USD remains vulnerable near 1.1450

  • The pair stays on the defensive in the mid-1.1400s on Tuesday.
  • The greenback keeps the bid tone above the 96.00 handle.
  • Italy, Brexit remain in centre stage so far this week.

The demand for the European currency remains subdued in the first half of the week and is motivating EUR/USD to navigate in the lower end of the recent range near monthly lows at 1.1430.

EUR/USD looks to Italy, Brexit, risk sentiment

The pair is shedding ground for yet another session, adding to Monday’s losses and briefly testing the vicinity of October’s low around 1.1430.

Despite investors’ concerns over Italian politics appear somewhat mitigated following recent comments by Italian officials, the issue is far from over and this is echoing in higher Italian yields early in the European session.

In addition, the risk-off mood is prevailing among traders and is also sustaining the better tone in the greenback and the Japanese Yen. The US Dollar Index managed to regain the critical 96.00 handle and is now looking to extend the up move.

Data wise in Euroland, German Producer Prices rose 0.5% MoM in September, more than initially forecasted. Later in the session, and in absence of relevant publications, speeches by BoE’s Haldane and Carney should grab attention along with speeches by FOMC’s R.Bostic and N.Kashkari.

EUR/USD levels to watch

At the moment, the pair is losing 0.03% at 1.1461 and a break below 1.1432 (low Oct.9) would target 1.1323 (200-week SMA) en route to 1.1299 (2018 low Aug.15). On the upside, the next resistance emerges at 1.1508 (low May 29) seconded by 1.1550 (high Oct.22) and then 1.1553 (21-day SMA).

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