The euro hit session lows against the dollar on Thursday, as concerns over political deadlock in Italy continued to weigh, while US data showed that fourth quarter gross domestic product was revised higher but missed expectations. EUR/USD hit 1.3087 during US morning trade, the session low; the pair subsequently consolidated at 1.3091, shedding 0.34%. The pair was likely to find support at 1.3040, Wednesday’s low and an almost seven-week low and resistance at 1.3160, the session high. Concerns that a political deadlock in Italy could destabilize sovereign debt markets in the euro zone eased after an auction of Italian bonds on Wednesday went smoothly. But the euro remained under pressure amid fears that Italy would not be able to continue to implement structural reforms and austerity measures following inconclusive election results. The euro was lower against the pound and the yen, with EUR/GBP down 0.45% to 0.8626 and EUR/JPY sliding 0.28% to 120.80. Earlier Thursday, official data showed that the number of people unemployed in Germany fell by 3,000 to 2.9 million in February, slightly below expectations for a decline of 5,000, while the unemployment rate held steady at 6.9%. Revised data showed that Spain’s economy contracted by 0.8% in the fourth quarter, from an initial estimate for a 0.7% contraction, bringing the annual rate of contraction to 1.9%.
EasyForexNews Research Team