Euro continues to struggle mightily with the $1.34 level

The euro continued to struggle mightily with the $1.34 level of technical resistance this past week. Yes, it mangage to close above $1.34, but not with any definitive level of strength. It closed Thursday before the holiday at $1.3463, but on Friday the solid monthly employment report reversed sentiment and now, after hours, the euro is trading back below $1.34, at $1.3397. There is no good reason for the euro to trading with an upwards bias, but strong anti-dollar investor sentiment has continued to ignore underlying fundamentals.

I wouldn't be surprised if speculators managed to keep the euro up in the $1.34 to $1.35 range for the next few weeks whenever there is any bad news to focus on, but it is just as likely that they will trade it back down under $1.30 as soon as people grasp the truth that the Fed is very unlikely to cut rates over the next six months.

In short, the dollar is not "plunging."

-- Jack Krupansky