EUR/USD: Recovery attempts sold-off near 1.1400 amid Turkey fears
- Euro pressured amid fears of Turkey contagion on Europe.
- A light calendar keeps trading thin, as the focus remains on Turkey and Italy.
The EUR/USD pair failed its recovery attempts once again just ahead of the 1.14 handle, as the bears continue to fight for control amid tumbling European banking stocks on fears that Turkey’s economic crisis could spill over into Europe. The list of major banks exposed to Turkey’s contagion are Spain's BBVA, Italy's Unicredit, and France's BNP Paribas.
The common currency hit fresh 13-month lows against its American counterpart in the Asian trades at 1.1366 and now remains within a striking distance of the yearly lows, as the Turkish Lira re-approaches the record highs of 7.1326, following a temporary bounce on the Turkish central bank’s intervention measures.
More so, the US dollar remains broadly underpinned amid better US growth prospects and the Fed’s tightening path, further keeps the bearish tone intact around the spot. The USD index consolidates near 13-month lows of 96.52, up +0.07% on the day.
Looking ahead, the pair will track the USD/TRY price-action and developments around Turkey for any fresh trading impetus, as the economic calendar remains absolutely data-dry today.
EUR/USD Technical Levels
Melina Deltas, CFTe, Investment Analyst at XM, notes, “in the wake of negative pressures, the market could meet support at the 1.1300 psychological level, taken from the low on July 2017. A successful close below this level could see a test of the 61.8% Fibonacci, near 1.1180 before bearish actions strengthen towards the 1.1115 support, where the price bottomed on June 2017. However, if prices are unable to break the aforementioned 13-month low in the next few sessions, the risk would shift back to the upside, with the 50.0% Fibonacci of 1.1440 coming into focus.”