EUR/USD consolidates losses under 1.1500

• US dollar still remains strong on risk aversion and Fed policy expectations. 
• Euro pressured by Italy’s budget drama and Brexit. 

The EUR/USD pair bottomed during the US session at 1.1454. It rebounded from the lows to 1.1475. As of writing was trading at 1.1470, 45 pips below last week close. The euro erased Friday’s gains and continues under pressure. 

Price is back near the low bottom of a consolidation range with technical indicators favoring the downside. But in order to trigger more losses, a consolidation significantly below 1.1460 appears to be needed it. 

From a fundamental perspective, Brexit negotiations affected risk appetite. The rating agency Moody’s offered some support to the euro by keeping the outlook ‘stable’ despite revising lower its credit rating. Still the euro looks vulnerable. Beyond Italy and Brexit, the next key events will be on Thursday: the European Central Bank meeting. No change in rates is expected but the statement and Draghi’s tone could influence the euro. 

EUR/USD Levels to watch 

To the downside, the immediate support is the 1.1460 area. Below, the 1.1430 zone (last week lows) would be exposed and a break lower could trigger more losses to the 1.1400 area.  On the flip side, resistance could be located at 1.1495 (20-hour moving average), 1.1525 (Oct 18 high) and 1.1550 (Oct 22 high).