EUR/USD has plunged close to 0.9500. A break below here would trigger a substantial drop, economists at ING report.

Some consolidation may be due above 0.9500

“Traditional drivers of the EUR/USD such as two-year swap differentials and terms of trade are having no say in EUR/USD pricing right now. However, EUR/USD, at 0.9500, would be near the lower of a bearish channel that has contained this year's orderly descent in the dollar – so perhaps some consolidation may be due above 0.9500.”

“But one-week EUR/USD implied volatility is still changing hands at the highs of the year 15% – warning of fast markets if 0.9500 breaks.”