EURO/US DOLLAR
Friday international ratings agency DBRS cut Italian sovereign debt fro A to BBB. Now that none of them give the country and A (let alone any higher) it means that the ECB will have to take a bigger haircut when this paper is used as collateral. Note that the Eurozone’s central bank does not disclose what penalties it uses on any assets it accepts regularly. Exactly the problem that lies at the heart of risk weightings.
SHORT TERM TRADER: Square.
POSITION TAKER: Small short at 1.0525; stop above 1.0700. First target 1.0050.
| SUPPORT | RESISTANCE |
| 1.0565 | 1.0635 |
| 1.0500 | 1.0695 |
| 1.0390 | 1.0800 |
| 1.0340 | 1.0825 |
