Euro Recovers From Yesterday’s Flash Crash Ahead of US Data

The  euro today was on  a  recovery path following yesterday’s “flash crash” that was triggered by  Apple’s profit warning based on  the  economic slowdown in  China. The  EUR/USD was also under pressure due to  the  decline in  German bond yields and  the  placing into administration of  an  Italian bank by  the  ECB.
The  EUR/USD currency pair today rallied from an  opening low of  1.1308 to  a  high of  1.1384 in  the  European session.
The  currency pair was one of  the  least affected by  yesterday’s “flash crash” that affected most Asian currencies and  other riskier currencies.   The  euro was further weighed down by  the  European Central Bank‘s decision to  place Italy’s Carige Bank under administration after many of  the  bank’s top executives resigned. The  bank has been facing problems after shareholders recently failed to  approve its latest plan to  raise €400 million. This move is evidence that the  financial system in  Italy is facing significant risks given the  large burden of  non-performing loans held by  most banks.
The  currency pair’s recovery stalled at  a  crucial resistance level and  analysts are waiting to  see where it will head later. The  euro is also looking to  the  German bond yields for  direction given that they were depressed during yesterday’s session.
The  currency pair’s short-term performance is likely to  be affected by  the  release of  the  US ADP employment data and  the  ISM manufacturing data later today.
The  EUR/USD currency pair was trading at  1.1355 as  at  11:22 GMT having dropped from a  high of  1.1384. The  EUR/JPY currency pair was trading at  122.18 having recovered from a  low of  121.30.

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