Euro falls significantly during the trading session on Tuesday to test major support

The EUR/USD pair has broken down significantly during the trading session on Tuesday, reaching just above the 1.15 level before bouncing rather significantly. There are plenty of resistance barriers above the keep this market going down, and if we can break down below the 1.15 handle, the market should continue to go much lower. I think that the market has been very negative in general, and it makes sense that the fears coming out of Italy will continue to plague the Euro in general. At the same time, we have interest rates rallying in the United States, and that continues to put a lot of bearish pressure in this market. If we were to break down below the 1.15 handle, the market could go down to the 1.13 level after that.

I think we quite frankly need to see a bit of a bounce to build enough momentum to finally break through the 1.15 level, assuming that we do so. However, there are so many negative headwinds coming out of Europe right now that it would not surprise me. I think that the markets continue to be very erratic, but pay attention to the bond markets in Italy, that will probably drive where this goes next. The US dollar should continue to strengthen during most of the summer.