If you can remember in the past (2000-2004) everytime the euro went down against the dollar, the European central bank would intervene buying the EUR to support it and to stop its decline. Such moves used to changed the EUR 50-100 pips.
The ECB stopped to intervene since that time. Now the EUR hovering above the 1.35 against the USD, would surely hurt the European Economy. People around the world would think twice before buying a car made in the EU, because it is now 35% more expensinve than it was 3 years ago. Many friends of mine from the states cancelled their trips to greece this summer (2007) due to the high price of EUR. A hotel which used to cost 100 USD per night, now is 135 USD per night.
A question now is raised, will, and when, would the ECB intervene to take down the EURO back to the 1.20's?? at least?