Italy is downgraded

Italy was downgraded following the significant impact of the global Covid-19 pandemic


Rating agency Fitch has downgraded Italy's rating to "BBB-" from "BBB+" with a stable outlook, saying "the downgrade reflects the significant impact of the global Covid-19 pandemic on Italy's economy and the sovereign's fiscal position." This decision puts more pressure on the single currency ahead of the ECB meeting tomorrow.

From a technical point of view, EUR/USD has escaped from triangle pattern in place since March and is capped by its 50-day moving average (in blue). The daily RSI stands within its selling area between 50 and 30. Readers may therefore consider the potential for further weakness below Apr. 14 top at 1.0990. The nearest support would be set at horizontal support at Apr. 23 low at 1.0725 and a second one would be set at set at March bottom at 1.0630 in extension.

Source: TradingView, GAIN Capital


More from Forex

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.