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EUR/USD is now trading at the lowest level in two weeks, diving below a strong support. The Irish downgrade is the main driver, but not the only one.

EUR/USD is now at 1.3134, after it lost the 1.3180 support line with a sharp fall. This happened together with the significant downgrade of Ireland by Moody’s. The credit agency cut 5 notches out of the rating, and warning that more downgrades will follow.

Credit agencies are late in many cases, and also here, the harsh downgrade comes after the bailout program has already been approved by the EU, Ireland and the IMF.

This joins a warning by Moody’s about Spain earlier in the week. It had a strong, though temporary impact on the Euro. Now, with the pressure towards the end of the week and additional downgrade of Ireland, the hopes that were left out of the EU Summit are gone – at least until the markets close.

EUR/USD faces support at 1.3114, which is not that far, and it’s followed by the round number of 1.30. Just after it, 1.2970 is an additional line. A surprising reversal will meet resistance at 1.3180 and 1.3267.

For more technical levels, see the EUR/USD forecast. If you want learn more about how the European summit will impact the pair, see the EU Summit preview. This will definitely impact trading at the beginning of the next week.