EUR/USD Breaks Support – At Two Month Low

The ongoing Irish crisis, with all its very wide collateral effect is taking its toll – Euro/Dollar fell to a two month low. There were too many negative remarks about the future of the Euro that added to the drop as well.

EUR/USD now trades at 1.3420, under last week’s low of 1.3450 and under the 1.3440 support line to a two month low.

Next levels below are 1.3334, which was a peak in August, followed by 1.3267 and 1.3114. Above we have 1.3530 and 1.3640. See more levels and a full analysis in the EUR USD forecast.

The Irish government is hardly holding on to power, as political anger grows on the EU / IMF deal. Spain’s bond auction fell short of expectations – raising less capital than expected and getting yields which were double the previous yields.

Add higher spreads between benchmark German bonds and between both Spanish and Portuguese bonds, a note from both Rehn and Merkel that the Euro is endangered, the North Korean attack, and you have all the reasons for a falling Euro – internal and external problems combined…

The release of a slightly weaker-than-expected US Existing Home Sales figure, didn’t help the Euro either. The annual figure of 4.43 million compared with 4.51 that was predicted didn’t cushion the fall.

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