MARKET DEVELOPMENT – EUR DIPS ON ITALIAN CONCERNS
EUR: The Euro once again is under pressure with concerns surrounding Italy and the potential collision course that is faces with the EU following the announcement of the budget proposal. Redomination risks were back on the rise after the Eurosceptic Borghi reiterated that Italy would be able to better handle its debt with its own currency. Consequently, this sparked selling in the Euro, as Bund-BTP spreads rose to multi year highs.
GBP: As mentioned yesterday with the Conservative party conference now underway there is a risk that history may repeat itself with the Pound underperforming amid the conference. Headline risk remains elevated and political noise from the conference continues to suggest a lack of unity and thus weighing on the Pound. On the data front, construction PMI fell short of expectations, having dropped to a 6-month low. Focus will be on tomorrow’s services PMI report.
USD: Risk aversion sparked a flight to quality bid in the US Dollar, which in turn breached the 95.00 level. Yesterday’s bounce from the 23.6% Fibonacci retracement has also help keep the Dollar supported.
Monday, October 2, 2018 – North American Releases
: Monday, October 2, 2018
EURUSD Chart of the Day
EURUSD: Data shows 50.6% of traders are net-long with the ratio of traders long to short at 1.03 to 1. The number of traders net-long is 16.0% higher than yesterday and 27.7% higher from last week, while the number of traders net-short is 1.7% higher than yesterday and 15.1% lower from last week.
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