Will the Euro Drop to 1.40?

Forex trading forecast for EUR/USD

The U.S. dollar appears to be continuing its rally today, heading higher as concerns about Chinese monetary policy keep forex traders looking for a safe haven. Greenback is gaining against the sterling this morning, as well as against the euro.

It is the euro, though, that seems on the verge of a true retreat. The forex trading forecast for EUR/USD is being influenced by a number of factors right now, almost none of them euro positive. Some of the biggest issues, as one might expect, are PMI and the continuing problems with Greece.

With euro zone service PMI logging the worst reading in four months, and with Greece continuing on the verge of financial collapse, there are a lot of economic issues piling up. It is little surprise that there is speculation that the euro might fall to the 1.40 level.

Until things improve for the euro zone economy overall, and until countries like Greece manage to get themselves out of trouble, it looks as though the advantage in the EUR/USD pair is all on the side of the greenback.