One can argue that this has been coming after the euro suffered a failure in its latest breakout above the swing region around 1.0283 two weeks back. The push higher stalled at the 61.8 Fib retracement level at 1.0361 and quickly reversed, with the dollar also gaining solid momentum across the board against the rest of the major currencies.
The break back below 1.0100 was all but confirmation of a move heading back towards parity and we're now within striking distance of parity again. The last time we got here was back in July but I fear that this time around, it isn't just going to be a case of touching base with the key psychological level.
There's no need to beat around the bush. The outlook for the euro area region and the euro currency is rather bleak. I'm struggling to think of positives here and unless there is a material change to that, the path of least resistance seems to be a move lower for EUR/USD .
On the daily and weekly charts, the 1.0000 mark is obviously the key one to watch in the sessions ahead. The July low at 0.9952 will also be a technical support to be wary of but nothing comes bigger than parity for the pair at the moment. If we do see a break to the downside, the drop could quickly accelerate towards 0.9800 next at least.
