EUROPEAN RISK FACTORS FORCE THE EURUSD LOWER

The EURUSD has fallen to a eight day trading low, hit by concerns that Italy will be holding early elections, Greek bailout woes and comments from Mario Draghi.

On Monday the ECB head said that weak EU inflation and wage growth are increasing the need for the ECB to maintain the current path of monetary stimulus.

Furthermore comments by former Italian Prime Minister Matteo Renzi, saying that he is in favor of holding an election at the same time as Germany in September, combined with reports overnight that Athens may opt out of its next bailout payment all are weighing on the single currency on Tuesday.

The EURUSD currently trades around the 1.1120 area with further short term selling expected whilst trading beneath the 1.1130 region.

Short term support has eroded after the pair quickly fell through the 1.1148 support level, with 1.1100 and 1.1080 now becoming near term support fo the EURUSD.

The M15 chart shows strong moving average resistance above 1.1130 at 1.1148 and 1.1162 are expected to cap any upside bounces.

Medium term support is located at the H4 100 period moving average at 1.1080, with the daily 20 period period moving average close by at 1.1072.