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The fast decline of the euro has occurred, causing the EUR/USD to drop significantly from its previous level of 1.0920 to a low of 1.0885. It is important to note that the sellers are attempting to cross the 200-hour moving average for the day, which would result in a change in the recent trend to become more negative.

If the ECB is trying to justify the need for stricter policies and possibly continuing this agenda in September, a sudden drop in economic activity will not be seen as favorable. This will lead to concerns about growth prospects, especially with tighter credit conditions expected in the near future. Overall, the outlook does not appear very optimistic.

It is probable that this will reject the current strong position of the dollar and the cautious attitude in the market. The data has caused a decline in bond yields and it seems doubtful that stocks will recover before the weekend.

If the Euro breaks the 200-hour moving average, it will be an opportune time for sellers to resume the downtrend. They can aim for the 100-day moving average at 1.0808, which could become a significant target if the German PMI also falls short.

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