Forex Forecast: EUR/USD Treads on Oversold Territory but Bears in Control on Italy’s Rate Deficit
Italy has given the green light to a deficit of 2.5 pct, going against existing rules set forth by the European Union.
A steady stream of indicators wraps up the quarter as the Federal Reserve is still heard.
The currency pair is treading on oversold conditions, but the bears are in control.
The EUR/USD forex pair currently trades near 1.1600, stretching the retreats witnessed last Thursday.
The Italian government has given the go on a deficit of 2.5 pct, higher compared to the 2 pct target and 1.5 pct that Finance Minister Giovanni Tria requires.
This latest development sparks a sell-off in Italian bonds and likewise affects the Euro. Tria, a technocrat, remains in his position, at least for now, to “prevent chaos” as he said.
The EUR/USD currency pair is likewise on the backfoot as a result of the greenback’s solid performance.
The US currency enjoyed a validation of the strong 4.3 pct annualized growth rate in the second quarter.
The Durable Goods Orders report was generally favorable with a rise of 4.6 pct on the headline but less spectacular fundamental figures.
Meanwhile, markets continue weighing on the Fed’s rate verdict. The central bank increased its rates and signaled four more until 2019.
According to a statement by Fed Chair Jerome Powell, the economy is robust, and jobs figures are high, and inflation low.