After Moody’s Investors Service downgraded Italy’s credit rating, EURUSD approached the 2-year low around $1,2166.
On Friday, the rating agency surprised everyone as nobody had expected that Italian bonds would see a rating cut. Therefore, the rating was cut down to Baa2, with a negative forecast. The report was released several hours before another Italian bond auction.
The rating cut suggests that foreign investors’ demand for Italian bond is rapidly declining. This couldn’t but affect the common Euro currency. Since early 2012, the Euro has already lost 5.7% of its value against the US dollar. The ECB’s decision to cut the interest rates was another factor contributing to the weakness of the common currency.
According to the SRP Department of , EURUSD is recovering against the mid-term downtrend. There is a reversal level oh H1, which corresponds to a wave of level M15. The main line and the S/R line of the AO_Zotik have just intersected each other on timeframe h4. The long-term support level is located at 1.1955.
