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EUR/USD testing 1.2700

FXStreet (Edinburgh) - The singe currency keeps falling on Thursday, with the EUR/USD putting the 1.2700 support to the test.

EUR/USD weaker on USD strength, Draghi

The solid performance of the greenback continues to weigh on the common currency in the second half of the week, dragging spot to fresh 15-month lows in the boundaries of the critical support at 1.2700. In the same tone, dovish appreciations from ECB’s Draghi in his speech in Lithuania also collaborated with the downside. Data wise in the euro area, M3 Money Supply expanded at an annual pace of 2.0% in August while Private Loans dropped 1.5% YoY in the same period. US Durable Goods Orders and the weekly report on the labour market will be in the limelight ahead in the session. In the opinion of Lee Hardman, Currency Analyst at BTMU, commented, “However, we remain somewhat cautious that US dollar strength maybe getting a little ahead itself in the near-term as the break higher has not yet been supported by a widening of yield spreads in the US dollar’s favour. Nonetheless we acknowledge that the latest developments have further increased the risk that US dollar strength will continue to prove more front loaded”.

EUR/USD levels to consider

As of writing the pair is losing 0.50% en 1.2715 and a breakdown of 1.2661 (low Nov.13 2012) would open the door to 1.2627 (low Sep.7 2012) and finally 1.2561 (low Sep.6 2012). On the upside, the initial hurdle aligns at 1.2816 (low Sep.22) ahead of 1.2864 (high Sep.24) and then 1.2872 (10-d MA).

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