The euro hit the lowest levels in over a year before finally hitting support at the 6/13/07 low of 1.3263. Indeed, fears of a financial market meltdown drove the US dollar higher across the majors as the G7 failing to announce significant commentary during the day.
In fact, the only news regarding the G7 meeting was generally negative, with Italian Finance Minister Giulio Tremonti refusing to endorse a draft statement, saying that it was “too weak.” Meanwhile, comments by Italian President Silvio Berlusconi saying that they discussed “suspending the markets for the time it takes to rewrite the rules” sent stock markets diving lower. Mr. Berlusconi later rescinded his statement, saying he didn’t mean it, but the reaction of the markets highlights how incredibly important it is for official to issue a strong statement or plan in the near-term. As a result, a meeting of European Union members on Sunday will be key to where EUR/USD goes next. Given the sharp reversal in EUR/USD from 1.3260 on Friday, I think there’s some bullish potential for the pair early next week, unless the G7 and European Union meetings fail to yield anything that boosts investor sentiment.
Related Article: Euro/US Dollar Forecast to Decline According to Forex Trading Signals Check out Daily Fundamentals in its entirety for analysis and outlooks on the US dollar, euro, British pound, Japanese yen, and the commodity dollars.