The euro free-fall has stalled above the 50.0% Fibonacci retracement of the end of May rally to days prior to Fed fallout on tapering. Price action displays a potentially oversold euro that is showing little sign of abating.
The fate of the euro may actually fall into the speeches that will be delivered by several Fed members this week. Tomorrow, we will hear from Kocherlakota, Fisher and Dudley. Thursday is Powell and Lockhart. While has Friday Stein, Lacker, Pianalto, and Williams.
The dollar may rally on stronger U.S. data, but the Fed members will likely confirm that the end of easy money is far from here.
The euro however does not have solid fundamentals in its immediate path. As concerns grow for Spain, Italy and France, we may see any rebound be short-lived.
The 200-day simple moving average may provide tentative support near the 1.3070 region, but if price has deeper declines, major support will reside just above the 1.2800 level.
If the euro manages to stabilize over the next couple of days, sellers may look to return at 1.3250.
This Article was posted on Trader Planet