The EUR USD continued its plunge into the mid-session astraders remained nervous that sovereign debt issues would continue to spreadacross the Euro Zone.
The EUR USD continued its plunge into the mid-session astraders remained nervous that sovereign debt issues would continue to spreadacross the Euro Zone. Particularly, traders believe that the high level of debtin Spain and Portugalwill lead to even deeper problems in those two countries.
Although Greecereceived close to $146 billion in financial aid from a joint EU/IMF bailoutpackage, traders were disappointed that the policymakers did not address theother problems in the Euro Zone. Many feel that the EU/IMF is falling behind thegrowing debt issues in the Euro Zone and being reactive rather than proactive. Thequestion being asked is how far will the EU/IMF allow the fiscal problems in Spain and Portugal to worsen before aid iseven considered?
Today’s hard sell-off in the Euro today indicates that theshorts are still in charge. Based on the chart pattern, downside momentum seemsstrong enough to suggest that a test of the recent bottom at 1.3114 is likely. Inaddition, it looks as if 1.3342 will be defended by short traders.