EUR/USD falls to a low of 1.1797 as we get into European morning trade

EUR/USD H1 03-09

The euro is continuing to pull back further on the week after having touched 1.2000 on Monday, with the drop yesterday putting sellers back in near-term control on a break under both the 100 (red line) and 200-hour MAs (blue line).

The ECB is now a major focal point for euro traders ahead of the policy meeting next week, particularly after more jawboning from earlier today here.

This has put pressure on EUR/USD as the pair falls to a low of 1.1797 and is now testing the 1.1800 level as well as a near-term trendline support @ 1.1805.

Keep below those levels and sellers will feel more comfortable in chasing an extended drop, with further support seen closer to 1.1780 and then the 27 August low @ 1.1763.

As we look towards the ECB meeting next week, it may be tough to argue for a continuation of the euro's sustained rise as there will be fears surrounding more jawboning by Lagarde & co. next Thursday.

That may be a signal for the dollar to also keep on the offensive for now, but tomorrow's US jobs report will also add another risk element ahead of the weekend.