EUR/USD: How far can the Euro fall?

In the past 4 months we have seen a massive drop in the EUR/USD, and the question is- when will it finally bottom out?

Not yet…


Just four short months ago, the Euro was trading high and actually briefly flirted with 1.39, but the enthusiasm for the European currency quickly evaporated as the outlook for the region started looking grimmer and made American assets look more attractive for Investors worldwide.
CPI numbers have been declining steadily for the entire year, making the threat of deflation an imminent possibility.
I think its a little early to talk about an outright recession but the pressure is on the ECB, to take swift action and use their entire arsenal to lift up the entire Euro Zone, and that means injecting more money into the markets, which should cause a further decline of the euro.
I see the {{1|EUR/USD}} bottoming at $1.30, especially if we continue to see positive momentum from the US economy- GDP numbers coming out this Thursday could prove to be a catalyst for another big drop.
The momentum is all about the Dollar right now, and it will be really tough to bet against the greenback.
Unless there is a surprising decline in US data, I do expect to see $1.30 in the near future.

In my mind there are 2 reasons for the EUR inflation: negative deposit rate and probably some action of ECB in the market. I have to say the push down is really strong, and my only regret is that I don’t have a bigger account.

I was expecting a bottom at 1.28 and PipMeHappy at 1.22
You have to explain your 1.30 a bit more.

BY looking at higher time frames, 1.30,1.28,etc is not far away. This is a killer down trend.

I think the Euro can fall as much as it needs to fall, because if there are no strong fundamentals reasons to support it, the Single Currrency is bound for more loses.

This is where currency speculation ( at the highest level) can be bad for a country and has real effects on people: a Euro falling too low would severely limit European travels abroad, to name a very immediate consequence, and European ability to attract capital investment through higher inflation and interest rates… If, also, Euro-zone countries were poor exporters, a devaluing Euro would have no significant benefit in this area…

Food for thought…

You are right.
On the other side, FED can make EUR fall from the sky (1.40 to 1.20) in couple of days just by pure panic. This would be nightmare for everyone not only Draghi. I think ECB wants to be more in control. Can be ?