After some struggle, support at 1.35 was lost and EUR/USD is diving to levels last seen in back in February 2011. The final push came after Industrial New Orders fell more than expected, but the biggest engine for the fall is Ben Bernanke.
Euro/dollar fell below the September 12th swing low of 1.3495, and the move accelerated from there, down to 1.3475. The break still needs to be confirmed. Support at 1.3440 is very important. It’s getting quite close.
Industrial New Orders in the euro zone fell by 2.1%, more than 1.1% that was expected. Also last month’s numbers were revised down from a drop of 0.7% to a drop of 0.9%. Earlier, purchasing managers’ indices in the euro-zone disappointed, with the all-European services PMI being the worst – a drop from growth to contraction which was unexpected.
The 1.3440 was very active in the past few years. A convincing break below this line opens a whole new wide range that extends down to the year to date low of 1.2873. Near term support is at 1.3350 and 1.3250.
Resistance is at 1.35 at the moment, followed by 1.3580. For more lines and events, see the euro dollar forecast.
The main driver for the current move is the disappointing statement by the FOMC. Ben Bernanke and his colleagues announced an active Operation Twist, but didn’t go beyond this step, as many had expected.
This was the big blow, and now we’re seeing an extension that is fueled by stop loss order. EUR/USD is already at 1.3450.Get the 5 most predictable currency pairs