Forex - EUR/USD dips as market views greenback as oversold

Investing.com - The euro moved lower against the dollar on Friday as investors viewed the greenback as oversold and the euro ripe for profit-taking after the single currency spent several sessions near eight-month highs against its U.S. counterpart.

In U.S. trading on Friday, EUR/USD was down 0.13% at 1.3600, up from a session low of 1.3580 and off from a high of 1.3632.

The pair was likely to find support at 1.3506, Wednesday's low, and resistance at 1.3645, Thursday's high.

A U.S. government shutdown that began earlier this week due to congressional inability to agree on a spending package pushed the dollar down to levels ripe for bottom fishing on Friday.

The euro, meanwhile, hit highs not seen since February, which further fueled dollar demand in a session previously scheduled to see the release of the U.S. September jobs report.

The Bureau of Labor Statistics said on its web site that it was not collecting data, issuing reports, or responding to public inquiries due to suspension of federal services.

Markets were also mulling how the U.S. political deadlock will affect negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by Oct. 17.

International Monetary Fund head Christine Lagarde said earlier that failure to raise the U.S. debt ceiling could hurt the global economy and warned U.S. growth could drop below 2% this year.

Supporting the dollar, however, was a Standard & Poor's report stating that the debt ceiling debate is unlikely to change its U.S. sovereign rating.

"In our opinion, the current impasse over the continuing resolution and the debt ceiling creates an atmosphere of uncertainty that could affect confidence, investment, and hiring in the U.S. However, as long as it is short-lived, we do not anticipate the impasse to lead to a change in the sovereign rating. This sort of political brinkmanship is the dominant reason the rating is no longer 'AAA,'" the agency said.

Standard & Poor's stripped the U.S. of its coveted AAA rating in 2011 when brinkmanship surrounding a previous debt-ceiling debate sparked fears of a default.

"Standard & Poor's sovereign rating on the U.S. is 'AA+' with a stable outlook, which according to our rating criteria indicates that we believe there is a less than 1-in-3 chance of a rating change over the next two years."

Meanwhile in the euro zone, official data earlier showed that Germany's producer price index fell 0.1% in August, defying expectations for a 0.1% rise after a 0.1% slip the previous month.

Elsewhere, the euro was up against the pound and down against the yen, with EUR/GBP trading up 0.37% at 0.8461 and EUR/JPY trading down 0.32% at 132.02.