This year's trading of the EUR was expected to be driven by a disparity of interest rates between Europe and the U.S., but instead we have seen another side of trading. Risk aversion has crept back into the scene. Slowing economic data, new U.S. banking regulations proposed by the Obama administration, worries over Greece's financial situation, and now concerns of the Ben Bernanke's senate confirmation for a second term as Fed chief facing difficulties are some of the highlights that have increased risk aversion in forex trading recently.

For currency traders, this means a continued delay in the return of normal trading trends that were seen before the financial crisis. As we experienced last week, the Dollar rose after risk taking was sucked out of the market by the proposed new banking regulations in the U.S. that would force commercial banks to chose between a traditional banking business model or that of a securities trading firm.

Europe also faces its own risks as well surrounding the financial stability of not only Greece but also Portugal and Italy. Spreads on Greek government bonds eased yesterday from their record high on Friday, but the market feels Greece is a liability for the European Union increasing negative sentiment and pressure on the EUR.

Today's release of the German Ifo Business Climate may be a good indicator of how businesses view the state of the Euro-Zone economy. Another key data release will be the Preliminary GDP from England. This data will help to set the tone for this week's trading and should be followed carefully. Positive GDP results could sink the EUR further as the EUR/GBP could fall to the 0.8650 level.