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EUR/USD begins the week with a drop to a lower range, after failing again to break higher resistance. Will the drops continue? Here’s a quick update on technicals, fundamentals and community trends.

EUR/USD Technicals

  • Asian session:  Traded higher, but below 1.3400. Fall began when the Europeans joined.
  • Current range – 1.3267 to 1.3334.
  • Euro Dollar Chart - January 17

  • Further levels in both directions: Below   1.3267, 1.3180, 1.3080, 1.2970, 1.2920,  1.28, 1.2722, 1.2587.
  • Above  1.3267, 1.3440, 1.3576,  1.37, 1.3786,  1.3950 and 1.4030.
  • 1.3440 is the key level – it has stopped the Euro so many times in the past.
  • Important support is only at 1.3080.

Euro/Dollar dropping – click on the graph to enlarge.

EUR/USD Fundamentals –

  • 12:15 US FOMC member Charles Plosser talks.

* All times are GMT. For more events later in the week, see the EUR/USD forecast.

EUR/USD Sentiment

  • The market was very optimistic last week, but here are 5 doubts about the Euro rally.
  • The market awaits the meeting of EU finance ministers, and especially the decision if the bailout fund will be enlarged. It seems that Germany isn’t keen on adding more money.
  • Spanish bond yields are stable at 5.33%.
  • A bailout for Portugal is fading away, as bond auctions were quite successful – this includes also Spain and Italy’s auctions.
  • The bank holiday in the US, for Martin Luther King, means thinner volume later in the day.
  • Inflation is becoming problematic for Europe. This comes as employment is still high. Double trouble for Europe. Trichet showed concerns about inflation and boosted the Euro.

Currensee Community: 62% are long , 38% are short. These are 1298 open positions in real accounts trading this pair at the moment.