The euro continues to show very few signs of wanting to regain any lost ground as it makes its way towards the key long term support level of 1.28. After reaching a four month high above 1.34 a few weeks ago, the EUR/USD is in the midst of a very solid medium term down-trend which has seen it fall sharply and move to within reach of 1.28 for the first time in six weeks. Its decline was slowed a little over the last couple of weeks as it traded between 1.30 and 1.31, however in the couple of days to finish last week it has fallen strongly again moving down to close to 1.28.
It was only a few of weeks ago that the 1.30 level was standing up and proving itself to be a brick wall of support. This level, however, has now obviously been cleared and is providing some resistance over the last week.
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.
During 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 regarding 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.
Dovish remarks from the European Central Bank and the Bank of England drove their respective currencies down versus the dollar. The EUR/USD is trading below the 1.29 line. The pair started the decline after ECB President Mario Draghi maintained interest rates at 0.50% for the eurozone. He issued a pledge to keep rates low for a long as was needed. The market had been jolted earlier in the week as the political situation in Portugal continues to deteriorate. The US Non-farm payroll figures beat expectations which boosted the USD versus the EUR and GBP while also getting in line with Fed guidelines that could signal the end of QE in the US.
(Daily chart / 4 hourly chart below)
EUR/USD July 8 at 01:45 GMT 1.2825 H: 1.2833 L: 1.2811
EUR/USD Technical:
OANDA’s Open Position Ratios 
(Shows the ratio of long vs. short positions held for the EUR/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The EUR/USD long position ratio has moved a little close to 60% as the euro has continued to fall a little to close out last week. The trader sentiment remains in favour of long positions.
Economic Releases
- 01:30 AU ANZ Job Ads (Jun)
- 08:30 EU Sentix Indicator (Jul)
- 12:30 CA Building permits (May)
- 13:00 EU eurogroup Meeting
- 19:00 US Consumer Credit (May)