How in the world could Trichet have publicly raised the notion of holding ECB rates steady in January in the midst of a rapidly contracting global economy? Combined with a panic rate hike back in July, the great Trichet is looking less than stellar as the new year gets underway. Lost credibility is being reflected in the EUR/USD rate as the pair tumbles to levels not seen since before Trichet made those comments in Mid-December.

Next support for the pair is at 1.3377, the 61.8% retracement of the 1.2548/1.4719 rally. EUR/USD opens in New York near the lows for the day, at 1.3560.