Stocks may have managed some gains on Monday, but EUR/USD continues to head lower, coming off a head-and-shoulders pattern from the last several days. Instead of retracing losses against the USD, as have some of the other pairs, the single currency continues to be battered by technicals calling for lower valuations. Meanwhile November 9ths 1.4852 support has managed to hold although there are no guarantees the cross will hold if risk aversion continues. If breached, the next support lies at 1.4814.
There were no fundamental news to drive the moves this morning, except that U.S. Treasury Secretary Tim Geithner said the TARP could use used to pay off part of the country’s soaring deficit in the overnight. While such a development could help the USD in the long run, the deficit nevertheless remains nevertheless daunting.