EUR/USD: Settles Just Below Key Level Of 1.32

Throughout last week the Euro fell strongly away from the resistance level at 1.34 back to the support level at 1.32 and in doing so traded to its lowest level in one month. In the last 24 hours it has drifted a little lower and fallen just below 1.32 to be presently trading around 1.3190. For about a week or so the Euro was placing upward pressure on the 1.34 level however it stood firm. A couple of weeks ago the Euro made a run at the 1.34 level only to be turned away yet again and ease back under – this has been the story for the last few weeks. A few weeks ago it retreated heavily from above 1.34 after having reached a six month high around 1.3450. Over the last few weeks it has made several attempts to push through the 1.34 level only to be consistently repelled with ample supply. Several weeks ago it spent about a week drifting lower from the resistance level at 1.34 back towards the previous resistance level of 1.33. This level provided very little support for the Euro as it continued to move down strongly towards 1.3230 before consolidating recently above the support level at 1.3250.

Looking at the bigger picture the Euro has spent most of the last six weeks or so trading within a range between 1.32 and 1.34, with the former level now in the spotlight as it tries to prop up the Euro and keep it within the range. Back in early July the Euro was content to maintain the level above 1.31 and settle there, as it received solid support from both 1.30 and 1.31. On a couple of occasions it made an attempt to move within reach of the longer term resistance level at 1.32 and finally it finds itself trading on the other side of this level and being well established there. It has been some time since the Euro has experienced a 24 hour period with as much range as the period earlier in July when it surged higher from from below 1.28 up to above 1.32. Prior to that jump, the Euro had been in a very solid medium term down trend after succumbing to the resistance at 1.29 and moving down below the key long term level of 1.28. This resulted in it trading at a multi-year low near 1.2750. After reaching a four month high above 1.34 about seven weeks ago, the EUR/USD was in the midst of a very solid medium term down trend which has seen it fall sharply.

Throughout May and most of June the Euro surged higher to a four month high above 1.34. Before that in the first half of May, the Euro fell considerably from near 1.32 down to six week lows near 1.28. Back at the beginning of April the Euro received solid support around 1.28 and this level was called upon to provide additional support. Throughout this year the Euro has moved very strongly in both directions. Throughout February and March the Euro fell sharply from around 1.37 down to its lowest level since the middle of November around 1.2750. Sentiment has completely changed with the Euro over the last few weeks and the last couple of months has seen a rollercoaster ride for the Euro as it continued to move strongly towards 1.34 before falling very sharply to below 1.29 and setting a 6 week low.

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