EURUSD Trading at 1.2866 After Breaking Support, Same News Haunts Eurozone

After EUR/USD broke through floor support the other day in that perfect descending channel, or long-term downtrend since May 2011, tonight EUR/USD broke through 1.29 and is currently trading at 1.2866 (4:33am Eastern). The next line in the sand is the January 2012 low of 1.262. I have a post coming up on the GLD/SPY ratio, GLD, and SPY. The same risks are haunting the euro: the possibility of Greece leaving the Eurozone and causing market dislocations, insolvent banks, debt contagion spreading to Spain, Italy and Portugal, deflationary recessions in the Eurozone ex-Germany, and perhaps more easing by the ECB.

  • Greece crisis: Far left Syriza pulls out of talks, the anti-bailout party could win (BBC)
  • Germany warns Greece it will halt aid unless it commits to bailout agreements (Telegraph)
  • Bundesbank chief: no basis for further financial aid if Greece backs off rescue programs (AP at Washington Post)
  • Euro Will Have to Be Devalued to Save EU: Wharton Prof. Jeremy Siegel (CNBC)
  • Central Bankers Now Talking Publicly of Greek Exit (FT/CNBC)
  • Euro Officials Begin to Weigh Greek Exit (Bloomberg)
  • Greek exit not fatal for eurozone, says ECB's Honohan (Ekathimerini)
  • Greece will run out of money soon, warns deputy prime minister (Telegraph)
  • As European Austerity Ends, So Could the Euro (Bloomberg)
  • Fears over Spain linger despite banking plan (Reuters at Chicago Tribune)
  • Shades of Weimar? Only the ECB Can Save Europe – John Mauldin (WSJ - MarketBeat)
  • Bundesbank Prepared to Accept Higher Inflation (Spiegel)
  • German Central Bank Stays Tough on Inflation (WSJ)
  • Bundesbank boss tells Hollande to leave EU fiscal pact alone (AFP at Google News)
  • Euro zone output falls, bloc heading into recession (Reuters)
  • Coene says ECB may lower growth forecast in June (Reuters)
  • Desperately seeking a bailout for Spain and its banks: Nouriel Roubini (FT)
  • Roubini: EU To Break Up Once Contagion Hits Italy And Spain (Forbes)
  • Huge Sense of Doom Among ‘Grexit’ Predictions (CNBC)
  • Eurod√§mmerung (Paul Krugman at NYT)
  • Goldman Sachs Cuts Forecasts For Euro Against Dollar (WSJ)
  • Contrarian: Deutsche Bank Head Of FX Research Says Euro Breakup Fears Overblown (WSJ)

Below are two charts of EUR/USD (Euro/US Dollar) courtesy of