EUR/USD fails to break triple bottom despite Italian downgrade

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EUR USD unable to breach triple bottom despite Italian downgrade by Fitch March 8 2013

EUR/USD Triple bottom – click image to enlarge

Rating agency Fitch decided to downgrade Italy’s credit rating from A- to BB+ leaving the country’s negative outlook unchanged.  They do not see a stable government in Italy in the near future.

EUR/USD is reacting with another attempt to push through the 1.2960 that has been breached earlier, without any follow-through.

The pair fell earlier on the excellent Non-Farm Payrolls report from the US.

So far, Fitch had the highest rating for Italy. After the downgrade, Fitch matches S&P but Moody’s (which recently downgraded the UK), has Italy in a lower grade.

It’s important to note that while Italy has a political mess, most of the reforms are now on auto-pilot. So, the lack of a stable government doesn’t mean a lack of reform. In addition, Italy had over 60 governments since WWII, and the country is still quite rich.

EUR/USD

EUR/USD is now trading at 1.2973, after another move below 1.2960. The low for the day was 1.2957. Assuming the pair closes above this line, we have a triple bottom.

In the past two Fridays, EUR/USD twice fell below important levels: 1.3170 and 1.30, but eventually closed above these lines. The continuation was seen only afterwards.

For more levels and analysis, see the EUR/USD forecast.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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