The Euro rebounds above 1.07 against the US Dollar

Posted in EUR/USD

After the Italian Constitutional Referendum was rejected on Sunday with a clear majority, Prime Minister Matteo Renzi resigned. Just a few minutes later, the EUR/USD reached a new 20-month low, close to 1.05.  This area, once again, represented a valid support level for the pair. Indeed, exactly from there a significant rebound started a few hours later, pushing the rate above 1.075. The pair reached a maximum on Monday at 1.0797, before going back on Tuesday to 1.072. From a technical point of view the rate remains in the huge trading range between 1.05 and 1.15. We could have another bearish impulse if prices could go below 1.05, but so far, there is not a clear direction after the "irrational rally" of the US Dollar we saw in November, after Trump’s election. Trader’s attention in now focused on the next movements of both the Central Banks. Mario Draghi, ECB Governor is awaited to speak this week trying to gran stability to European banking sector, while the Federal Reserve is expected to raise interest rates in the meeting of December.