After the severe pressure seen a couple of hours ago, the Euro currency managed to suspend its depreciation against the US Dollar. This became possible due to positive economic stats from China: The country’s industrial production showed the highest pace of growth in 9 months thanks to a series of monetary stimuli implemented by Beijing.
That was a thigh of relieve for the Euro currency after Monday’s major losses when there was uncertainty over whether Spain would follow the path of Greece and Portugal and would ask for external financial support in order to come out of the debt crisis.
Nevertheless, the Euro is still close to the all-time low against the Aussie and the 12-year low against the Japanese Yen. EURUSD stays around 1.2100.
There is still considerable psychological pressure on the common currency because Germany’s credit rating is in jeopardy – Moody’s investors service downgraded the forecast for Germany’s rating. In the worst-case scenario, the next step will suggest a loss of the ultimate AAA rating. Apart from Germany, the Netherlands and Luxembourg received a warning as well. Obviously, the rating agency’s decision was mainly caused by the escalating uncertainty and instability in the eurozone.
According to , the downtrend of EURUSD is nearing the psychological support located at 1.2000. Right now the price is consolidating around the local low. In order to resume the downtrend, the price will have to break and consolidate below 1,2083. A trend reversal will become more probable if the price consolidates above 1,2142.
