BUZZ-COMMENT-EUR/USD is defining the limits of a new range

Feb 13 (Reuters) - EUR/USD is defining the limits of a new range that may hold throughout 2025, following the decisive breakout on the downside from a range in which it was previously trapped for almost two years.

The breakdown to 1.0125 from the 1.05-1.10 bounds has significantly impacted those trying to hedge future direction, forcing them to rethink and adjust positions accordingly.

The failure to overcome the base of the old range following the plunge to 2025's low on February 3 is likely evidence of a structural shift in FX flows, with traders adjusting for a marked decline in the range.

The highest traded since the tariff-inspired plunge in early February at 1.0443 is slightly below the lowest point - 1.0448 - traded when EUR/USD was confined in its prior range.

When EUR/USD reached this year's low, the drop technically over sold, leading to the rebound that may be the foundation for a deeper slide supported by expected changes in U.S. and euro zone interest rates.

There is a strong chance that parity shapes the base of the developing range. Bigger changes in fundamentals are probably needed to sustain a slide below this highly influential point.

Parity (1.0026 to be exact) is also the Fibonacci target for the drop from last year's 1.1214 high (start point for current downtrend), this year's low at 1.0125 and the subsequent high at 1.0440.

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