The EUR rallied in the Asian and European trading sessions, coming off of a breach below the significant psychological support level of 1.2000 vs. the USD.

However, as the Dow Jones Industrial Average sold off during the closing hours of the New York trading session, the 16-nation currency gave back most of its gains and the EUR/USD finished only slightly higher on the day.

The EUR/USD reached a high of 1.1990 before falling at the close of the day's trading. The EUR/GBP was unchanged at 0.8240, while the EUR/JPY was higher at 109.62 after opening the day at 108.44.

General risk aversion did not allow the Euro to keep its gains throughout the day as major stock indices were lower. The only bright spot was better than expected German factory orders. The release surprised traders by positing a 2.8% monthly increase on expectations of a decline of 0.1%.

Going into today's trading, Euro traders should remain focused on the range of sovereign debt issues from the nations of Greece, Spain, Portugal, and, most recently, Hungary, as these will be the primary issues surrounding the strength of the EUR and overall market sentiment in Europe.