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Euro Drops On Iran Sanctions

The euro drifted lower against its major counterparts in the European session on Tuesday, as European shares declined after a U.S. official said on Monday that President Trump was “comfortable with any outcome” from talks with Chinese President Xi Jinping at the G20 meetings in Japan this weekend.

Geopolitical tensions also remained in focus after the United States imposed new sanctions on Iran aimed at preventing some top Iranian officials from using the international banking system or any financial vehicles set up by European nations or other countries.

Sharply criticizing the new sanctions, Iran said the measures spell the “permanent closure” for diplomacy between the two nations.

In economic front, data from Destatis showed that Germany’s construction orders declined in April from the previous month.

The price-adjusted orders in construction industry decreased by a seasonally and working-day adjusted 1.7 percent month-on-month in April.

The currency traded mixed against its major counterparts in the Asian session. While it fell against the franc and the yen, it was steady against the pound. Versus the greenback, it advanced.

The euro fell to 1.1378 against the greenback, from more than a 3-month high of 1.1412 hit at 12:45 am ET. The euro is seen finding support around the 1.12 level.

The common currency dropped to 4-day lows of 0.8916 against the pound and 121.81 against the yen, from its early high of 0.8952 and near a 2-week high of 122.47, respectively. The next possible support for the euro is seen around 0.88 against the pound and 120.00 against the yen.

The euro slipped to 4-day lows of 1.4992 against the loonie, 1.6326 against the aussie and 1.7122 against the kiwi, off its previous highs of 1.5050, 1.6400 and 1.7222, respectively. If the euro falls further, it may face support around 1.47 against the loonie, 1.60 against the aussie and 1.70 against the kiwi.

On the flip side, the euro gained to 1.1112 against the franc, from an early 5-day low of 1.1062. The euro is likely to challenge resistance around the 1.13 mark.

Looking ahead, Canada wholesale sales for April, U.S. new home sales for May, S&P/Case-Shiller home price index for April and consumer confidence index for June will be featured in the New York session.

At 1:00 pm ET, Fed Chairman Jerome Powell will give a speech about the economic outlook and monetary policy at the Council on Foreign Relations in New York.

The material has been provided by InstaForex Company – www.instaforex.com