Where is the euro headed now?

This past week the euro has rallied a bit and it now up to $1.3178. It did poke above $1.32, but it is running into "technical resistance" at that level. In other words, the movement of the euro versus the dollar is at this time driven mostly by "technical" trading rather than fundamental considerations. I suspect that traders and short-term speculators could take a couple more shots at pushing above $1.32 and even $1.33, but they could simply give up and try to make more money by chasing the euro back down in its trading range.

Given that there is no serious expectation that the Fed will cut interest rates in the next six months, there is little fundamental reason for the dollar to "plunge" further from current levels.

I wouldn't be completely surprised if short-term players managed to push the euro up to $1.34 or even $1.35, but I do expect that the euro will more likely trade down below $1.30 again within a few weeks.

In short, the dollar is not "plunging."

-- Jack Krupansky