ForexLive US wrap-up: Germany to the rescue!

• WSJ: Germany to lead EU bailout for Greece, others with loan guarantees
• Reuters: Eurozone has agreed in principle to aid Greece
• FT Deutschland; Greek deal to be detailed to coalition on Wednesday
• EU’s Almunia: Greek package possible in exchange for clear commitment
• Almunia: Greek economic assumptions optimistic, must be willing to do more
• Greece proposes severe austerity law; higher taxes, wage freeze
• UK most vulnerable AAA sovereign, along with Spain and France: Fitch
• US wholesale inventories tumble 0.8%; drag on GDP
• US equities rally on Greek package hopes, rise 1.3%
• Shift from bonds to stocks pushes yields higher; 10-year note ends at 3.64% from 3.57%.
• Oil rises $2.20 to $74.09; gold rises $14 to $1077.
• More snow in Washington cancels Bernanke testimony before House on Wednesday. Text will be released at 15:00 GMT anyway.
• US retail sales data postponed by snow until Friday.

Just keep scrolling for all the headlines; they came fast and furious today. It was all about the EUR today as speculation (and potential confirmation) of a bailout for Greece dominated the trading day.

EUR/USD rallied as high as 1.3774 first thing in New York this morning on hopes for a package after Trichet cut short his Sydney sojourn. No one cuts short a Sydney visit in February to return to Frankfurt unless it is absolutely necessary, the logic went.

Selling by the BIS stalled the initial rally and credit jitters from an S&P downgrade of Citi and BofA and the comments from Fitch on the UK, Spain and France push prices briefly below the 1.37 level. Moments later, a Reuters headline saying that the EU had agreed in principle to aid Greece sent EUR/USD soaring, quickly breaking through 1.3775 and as high as 1.3840 before stalling.

A denial of the Reuters report saw EUR/USD dip to 1.3760 briefly and prices consolidated between 1.3770 and 1.3795 for the balance of the afternoon despite a WSJ article that suggests Germany will lead a bailout for Greece with loan guarantees.

1.3850 resistance was tested and held, a victory for the bears. Many want to wait and see concrete details of any package before taking EUR/USD any higher near-term.