Euro dollar is drifting in a high range at the beginning of the week, as the debt ceiling crisis in the US replaces the European debt crisis in the limelight. Downtrend resistance continues to cap the pair. How will this unfold? Here’s a quick update on technicals, fundamentals and what’s going on in the markets. EUR/USD Technicals Asian session: A very quiet session (especially for a Monday) sees range trading between 1.4325 and 1.4425. Current range 1.4325 to 1.4375 Further levels in both directions: Below 1.4325, 1.4282, 1.42, 1.4160, 1.4120, 1.4070, 1.3950. Above: 1.4375, 1.4450, 1.4550, 1.4650, 1.47, 1.4775. 1.4450 is not only a resistance line, but also the area where long term downtrend resistance caps the pair. On the daily chart, The line that began at the 1.4940 peak follows the 1.4575 mini-peak from the beginning of July and hits the charts around 1.4450. At current levels, the historic 1.4282 is of importance, with some support at 1.4325. Euro/Dollar sliding lower – click on the graph to enlarge. EUR/USD Fundamentals 13:00 European NBB Business Climate. Exp. -2.2 points. Actual -2.5 points. * All times are GMT. For more events later in the week, see the Euro to dollar forecast EUR/USD Sentiment US Debt Talks Stuck: Negotiations broke up late on Friday and new efforts are underway. This weighs on the US dollar.There are various options for a resolving the situation. Currently the drop dead date of August 2nd is just one week away and a major breakthrough isn’t seen in the horizon. A rating downgrade of the US is on the cards. Needless to say, a US default will rock the markets and send the dollar down. See three options about how this crisis could unfold. A big step in Europe: The leaders of the EU took big steps towards a full monetary union. The loans will be of longer maturities, the interest rates will be lower, and the bailout fund will be able to intervene in the markets and buy bonds – avoiding a bailout ahead of time. A European version of the IMF is also underway. Regarding the new package for Greece, it includes significant private sector participation. The EU is ready to accept that the rating agencies will declare a credit event that will trigger CDS. We have yet to hear from them, but this is clearly the long awaited Greek default. The Euro reacted with a huge rise after the news broke out. See more about the press conference that followed the summit. Slowdown: It is not only peripheral countries that are struggling. Also Germany and France have reported a significant slowdown in activity, in both manufacturing and services sectors. And today, the wide IFO survey, that is usually positive, points to a soft landing for Germany. Yields calm down: Spanish 10 year bond yields are coming back to normal. After a big plunge yesterday, they continue lower and touch the 5.6%, the peak of the previous level. They need to get below this line in order to declare a full return to normality. Italian 10 year note yields are also sharply down to 5.2% . The chance of a rating downgrade for both countries is now lower. US unemployment still problematic: Recent figures in the US, including the weekly jobless claims and the Philly Fed index are stable, but not encouraging enough. Yohay Elam Yohay Elam Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts. Yohay's Google Profile View All Post By Yohay Elam EUR/USD Daily share Read Next GBP/USD Recovering, EUR/USD Hesitant – Technical Analysis Yohay Elam 12 years Euro dollar is drifting in a high range at the beginning of the week, as the debt ceiling crisis in the US replaces the European debt crisis in the limelight. Downtrend resistance continues to cap the pair. How will this unfold? Here's a quick update on technicals, fundamentals and what's going on in the markets. EUR/USD Technicals Asian session: A very quiet session (especially for a Monday) sees range trading between 1.4325 and 1.4425. Current range 1.4325 to 1.4375 Further levels in both directions: Below 1.4325, 1.4282, 1.42, 1.4160, 1.4120, 1.4070, 1.3950. 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