EUR/USD broke below important short term support at 1.3290 and EUR/GBP fell below the psychologically important .9000 last night. More downside pressure is expected on the crosses in coming sessions. EUR/JPY will again lead the way in Asia after a volatile US session which saw the pair whipping around in a 200 pip range. I have no major bias just yet in EUR/JPY, but I think the failure at the 200-day MA is significant and I think we may well now see a consolidation phase, broadly between 129 and 137.

The EUR and the ECB are headed for some sticky times. The woes of Eastern Europe have not magically disappeared overnight and the ECB does not have much ammunition at its disposal. In the ugly contest, the EUR is running close to last and it is certainly at traditionally high levels against most of the other majors apart from the CHF and JPY. I do not think that this is the time to be overly bullish on EUR crosses.