EUR/USD extends decline, falls to lowest level in more than a month


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The 1.1500 level is now being eyed


ForexLive

Risk off flows continue to see the dollar, yen and swissie pull further ahead on the day and the euro continues to be weighed down by that and Italy’s budget worries. The single currency has now fallen to its lowest levels since 21 August against the greenback in trading at the moment.
The low for EUR/USD now touches 1.1513 with sellers eyeing a break of the support region between 1.1500-10. There isn’t any large expiries rolling off to the downside today but there is one that will help to bolster the defence at the figure level which rolls off tomorrow worth €1.3 billion.
But right now, it’s all about sentiment trading and notably the dollar and yen are staying well bid in European trading. The moves we’re seeing here may be a bit overdone for the time being as losses sustained by European equities are not astronomical to say the least. Italy is leading losses and FTSE MIB is only down 1.2% currently.
However, sentiment is sentiment and you can’t fight that. But I reckon markets will have to be wary and watch out for how US equities will perform later today. US equities have been known to fade moves like this so today could be one that plays out similarly too. We may not get a full recovery but at least the sentiment here may not be as sour as one may believe to be.
As for EUR/USD, if 1.1500 gives way then expect sellers to continue to build on that to drive price lower. The daily close will be important to watch in that aspect. One below 1.1500 will reinvigorate sellers to test the year’s lows in the days/week ahead.
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