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Forex - Euro trims gains against dollar

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Investing.com - The euro pulled back from session highs against the dollar on Tuesday as concerns over ongoing political instability in Italy overshadowed better-than-expected euro zone services PMI data.

EUR/USD pulled away from 1.3076, the pair's highest since Friday, to hit 1.3037 during European afternoon trade, up just 0.09% for the day.

The pair was likely to find support at 1.2965, Friday's low and the pair's lowest since December 11 and resistance at 1.3100, Friday's high.

The euro hit session highs earlier after data showed that Germany's services purchasing managers' index rose to 54.7 in February, up from a preliminary reading of 54.1.

The final euro zone services PMI rose to 47.9 from a preliminary reading of 47.3.

Another report showed that euro zone retail sales rose 1.2% in January, well above expectations for a 0.2% gain.

But the single currency remained under pressure amid concerns that Italy will be unable to pass structural reforms and austerity measures as the country edged closer to fresh elections, following inconclusive elections last week.

Worries over the outlook for Italy, the euro zone's third largest economy, fuelled speculation over a possible rate cut by the European Central Bank in the coming months.

The euro was lower against the pound and the yen, with EUR/GBP down 0.20% to 0.8601 and EUR/JPY sliding 0.19% to 121.54.

The Institute of Supply Management was to release a report on U.S. service sector activity later in the trading day.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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