More signals on EURUSD are coming. The dominoes principle set to work.
Yesterday the rating of Italy was downgraded from А+ to А by Standard and Poor's agency. It is worth noticing that the rating forecast had been negative.
The rating was downgraded due to political instability in the country and explicit flaws of the monetary policy.
At present Italy lacks any prospects of economic growth. Moreover, Moody's rating agency decided to dedicate another month to reconsidering Italy’s rating. Everybody is concerned about a considerable state debt and well-pronounced economic stagnation in Italy, third largest EU economy. In mid September the Parliament of Italy approved a new law on tough economic measures in the country and cutting budget spending by 50 billion euros. However, few analysts are assured that this law will help cope with the swelling crisis and stabilize the national financial markets.
As to the EURUSD reaction to lower rating, dodji formed in the day chart. Amid the news on the rating downgrading stagnation is now at its critical level - 61.8 of Fibonacci long-term correction.