The US equity market is falling this afternoon and its taking the EUR along for the ride. After all the euphoria concerning the Euro-zone last week, sentiment has reversed and and there are concerns now with the Spanish and Italian debt markets, as yields move higher. As quickly as traders said “risk-on†last week, they are chanting “risk-off†this week.
The European stock markets closed lower led by the IBEX35, bown 3.77%, the CAC 40 down 3.01% and the DAX down 2.49%. It’s no wonder the DOW has fallen.
After flirting with 1.3700 on Friday, the single currency is getting ready for a possible test of 1.3500 this afternoon. We have already taken out support at 1.3560 and 1.3540. A close below 1.3515 would target 1.3465 near term. In order to stop the downside momentum, we would need to close above 1.3600.
As I was writing the EUR news above, this just came across my desk. Apparently, Canada has decided to eliminate the penny and merchants will now round sales to the nearest five cents in cash transactions. This news has not affected the USD/CAD which is currently trading inteh .9980 region. One now wonders if the US will follow suit.
Another opinion:Â EUR/USD Gains Slowed Down At 1.3700, But Only Temporary (Elliott Wave Analysis)
