The euro continues to see a lot of trouble, as the debt in France remains a massive problem. As fiscal concerns continue for the second largest economy in Europe, this weighs on the currency.
EUR/USD
The euro has fallen during the early part of the trading session against the U.S. dollar as interest rates continue to climb in America. With that being the case, the market dropping the way it has should not be a huge surprise, as we see a lot of pressure in the bond markets. This will remain a massive problem for the euro, at least not until we get some traction in the French bond markets.
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But the interesting thing is, I think at this point, it's probably more about French debt. We've seen some weird spikes in the French debt markets as far as yields are concerned, as traders are worried about the ability to repay the debt that France is accumulating. The lack of fiscal responsibility is starting to get on the nerves of bond markets. This is a story that is just now starting, so we will see how much more traction this story gets.
Major support is broken in this pair.
All things being equal, this is a market that has broken down through a major support level. Now, it looks like the 1.10 level could be a target. Short-term rallies at this point in time, I do think, continue to attract sellers, especially near the 1.14 level if we do get that type of jump.
All things being equal, I remain bearish. I do recognize that we might be a little bit extended, but ultimately, I do think that we have lower prices to get to. This is a noisy pair, but I am ready to short signs of weakness after it bounces.
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