“¢ Euro started losing ground after Italy confirmed 2019 deficit target of 2.4%.
“¢ Surging US bond yields/upbeat ADP report helped revive USD demand.
The EUR/USD pair extended its retracement slide from an intraday high level of 1.1594 and has now drifted into negative territory for the sixth consecutive session.
The shared currency started losing early positive momentum after Italy’s deputy Prime Minister Luigi Di Maio confirmed 2019 budget deficit target of 2.4% and said that the government is still mulling over reducing the deficit in 2020 and 2021.
Meanwhile, a modest US Dollar uptick, supported by a fresh leg of an upsurge in the US Treasury bond yields, got an additional boost from upbeat ADP report on the US private sector employment and exerted some additional downward pressure on the major.
The pair has now retreated back to the 1.1530-25 strong horizontal support, which if broken decisively should pave the way for an extension of the pair’s near-term bearish trajectory as focus shifts to the release of ISM non-manufacturing PMI.
Technical levels to watch
A follow-through selling has the potential to drag the pair back towards retesting the key 1.1500 psychological mark, which if broken is likely to accelerate the fall towards 1.1440 support. On the flip side, the 1.1580 region now becomes immediate resistance, above which the pair is likely to surpass the 1.1600 handle and head towards testing 100-day SMA resistance near the 1.1645 region.
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