Euro Moves Sharply Lower Against The US Dollar

The EUR/USD has moved sharply lower post the US Treasury plan announcement.  I am not sure if it was a direct result of the official announcement (it had already been publicized) or simply a tired market.

The pair for the third day in a row topped out at the 1.3730ish area (see chart above).   This level is close to the 38.2% retracement of the move down from the July 2008 high of 1.6037 to the Oct 2008 low of 1.2329 comes in at 1.3745 (see chart below).  The move down may be more in reaction to it.  Also, stocks have come off the highs which tends to move the dollar higher on the Pavlov reaction by the market.

Clearly a break of this key level is important for the longer term bullishness for the EUR/USD to continue.    On the downside there is support at the 1.3515 to 1.3333 level.  There are a number of highs/lows at that area over the last few days.

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