EUR/USD finally broke below the 1.35 level on Wednesday as traders continue to worry about the debt crisis which seems to be getting worse each day in Europe. The Italian 10 year bonds started to fall in yield to just above 7%, but only because of the buying by the ECB. In fact, it seems the only buyer is the ECB presently. Spanish bonds are selling off, as well as French and Dutch. The EU is quickly seeing the effects of financial contagion. The Euro has to be thought of as toxic now, and any rally should be a selling opportunity at this point. As long as we can stay below 1.35, this market should fall much farther.
EUR/USD Forecast Nov. 17th, 2011, Technical Analysis