Forex - EUR/USD falls to 3-day low on concerns over euro zone banks

Forex Pros – The euro was down against the U.S. dollar on Tuesday, falling to a fresh 3-day low, amid renewed concerns over the health of euro zone banks.

EUR/USD hit 1.2783 during late Asian trade, the pair’s lowest since September 2; the pair subsequently consolidated at 1.2801, shedding 0.58%.

The pair is likely to find support at 1.2664, the low of September 1, and resistance at 1.2917, Monday’s high.

Late Monday, Germany’s Banking Association renewed concerns over the health of euro zone banks, saying that the country’s 10 largest banks would need EUR 105 billion of additional capital in order to meet new banking regulations put in place to prevent future financial crises.

That sentiment was echoed in a Wall Street Journal report on Monday, which highlighted the weakness of July’s euro zone stress tests of major banks. The report said the tests "minimised" their debt risks and "understated some lenders' holdings of potentially risky government debt".

The report went on to say, "An examination of the banks' disclosures indicates that some banks didn't provide as comprehensive a picture of their government-debt holdings as regulators claimed".

The euro was also down against the pound, with EUR/GBP shedding 0.44% to hit 0.8327.

Later in the day, Germany was to release key data on factory orders.