The EUR/USD breaks below the 1.0700 level

The Euro versus the Dollar started the session weak after the Paris attacks on Friday and drops below the 1.0700 level as seen on the daily chart. But the attacks on Paris are not the strongest reason of why the Euro has been dropping. In reality, the Euro remains weak, because of the divergence in monetary policies between the European Central Bank and the Federal Reserve. This week’s fundamentals could be key to the future direction of the pair. Tomorrow we have the ZEW economic sentiment out of Germany and the inflation numbers out of the US. If the inflation in the US has risen, then the FED could have another reason to raise interest rates and the EUR/USD could continue falling towards the 1.0600 level.