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   “¢   Surging US bond yields continue to underpin the USD demand.
   “¢   Italian budgetary concerns exert additional pressure on the Euro.
   “¢   Technical selling is likely to accelerate the downward momentum.

 
The EUR/USD pair kept losing ground for the second consecutive session on Tuesday and dropped to fresh six week lows in the last hour.

A combination of negative forces – resurgent US Dollar demand and Italian budget woes, kept exerting some heavy downward pressure and dragged the pair below an important horizontal support near the 1.1465-60 region.  

Growing market conviction that the Fed will raise interest further in December, and beyond, pushed the yield on the benchmark 10-year note to a fresh seven-year high and continued underpinning the greenback.

Meanwhile, the shared currency was further weighed down by concerns over a clash in the European Union over Italy’s budget and the same was evident from widening Italian-German 10-year bond yield spread, which remained above the alarming 300 bps.

With today’s downfall, the pair reinforced last week’s bearish breakthrough the 1.1530-25 support and hence, a follow-through weakness, led by some fresh technical selling, now looks a distinct possibility amid absent relevant market moving economic releases.

Technical levels to watch

Immediate support is pegged near the 1.1430 level, below which the pair is likely to accelerate the fall further towards testing the 1.1400 round figure mark. On the flip side, any attempted recovery might now confront fresh supply near the 1.1480 region and seems more likely to remain capped at the key 1.1500 psychological mark.