“¢ Italian political uncertainty continues to weigh on EUR.
“¢ Disappointing PMIs add to the already weaker tone.
“¢ Resurgent USD demand aggravates the selling pressure.
The EUR/USD pair remained heavily offered through the mid-European session on Wednesday, with bears now eyeing a fall below the 1.1700 handle.
Against the backdrop of growing market anxiety over the antiestablishment partnership in Italy, the selling pressure around the shared currency aggravated further on Wednesday following the release of flash EZ PMI.
Both the Services PMI and Manufacturing PMI fell to their lowest level in more than a year and signalled deceleration in the region’s growth momentum, which kept exerting downward pressure on the major.
This coupled with resurgent US Dollar demand, despite a sharp fall in the US Treasury bond yields, further added fuel to the already bearish sentiment and dragged the pair to its lowest level since mid-November 2017.
Moving ahead, today’s key focus would be on the release of latest FOMC meeting minutes, which might influence Fed rate hike expectations and eventually provide some fresh directional impetus.
Technical levels to watch
A follow-through weakness is likely to get extended towards mid-1.1600s before the pair eventually breaks below the 1.1600 handle to test 1.1575 support area. On the upside, 1.1750 level now seems to act as an immediate resistance, above which the pair could recover back towards the 1.1800 round figure mark.
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