
The foreign exchange market has not been behaving the way it should, and the euro has been the most disobedient currency of the majors.
In July the German ZEW expectations index (a measure of sentiment among German investment professionals) fell to a worse-than-expected 30-month low of -15.1, attributed to the European sovereign-debt crisis. The euro should have fallen, and it rose.
Days later, the flash composite PMI for July plummeted to 50.8 from 53.3, barely remaining above the boom-bust line at 50. The EUR climbed again.
So, with fundamentals not adding up, we'll instead look at technical analysis. However, depending on the time frame you look at, the EUR might be set to rise or go down. And, it isn't easy to determine which time frame to use, as the fx market is facing conditions never seen in the 37 years since the 1974 introduction of floating currency rates (and nothing has come close in the 12 years since the EUR was introduced).