The oft-traded EUR/USD has fallen sharply back towards 1.42 during today’s American market sessions after investors expressed concern that euro zone policy makers would not be able to respond rapidly enough to debt concerns in Greece and Portugal.
According to a report in Reuters, debt-laden countries in the euro zone are approaching a critical decision point and there is significant fear that regional officials will fail to meet that challenge in a timely manner. The euro/dollar, as a result, was seen pushing below its recent support at 1.43 to a current price just above 1.4210. If the pair breaches its psychological barrier at 1.42, forex traders could see a quick sell-off that pushes the pair into the upper 1.30s.
Rumors of an additional $87 billion aid package to Greece surfaced recently, which granted the EUR some effervescence in this week’s early trading. Greek officials have staunchly denied the rumor, however, dispelling any belief that the pair’s rise was sufficiently supported by fundamentals. This afternoon’s plummeting value, seen in this light, is indeed backed up by what analysts are viewing among the technical and fundamental figures.
Should euro zone officials continue to deliberate over further aid to these ailing economies, the EUR may find itself in a sharply bearish downturn versus its primary currency rivals. A downturn in French industrial production last month, alongside similar reports from Britain and Germany, has also caused a stir as many view the industrial and manufacturing sectors of the euro zone to be faltering this quarter.