Euro remains under tremendous pressure throughout the day on renewed concern on Greece. It's reported that Greece is seeking to amend the agreement with EUR to bypass IMF and in that case, Greece would avoid austerity measures that face strong domestic opposition. The news re-raised the uncertainty around the Greece situation and threw the whole rescue plan back into question. Euro is sharply lower against dollar and yen and dives to new record low against Aussie.

We talked about weakness of EUR/AUD earlier today, the outlook of EUR/CAD is equally bearish. The cross dropped sharply to as low as 1.3385 so far today and is set to take on key support of 1.3285 (2007 low).

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Sterling is also lower again dollar on news that UK Prime Minister Brown called an election for May 6. The result of the election will be an important factor to determine how quickly UK can reduce the record deficit and trim the national debt. Brown leans towards a slower exit on risk on a double-dip recession while Conservatives plan immediate cuts. The pound is under pressure by the uncertainty surrounding the outcome of the election as well as possibility of a hung government.

Dollar manages to ride on weakness of Euro and strengthens against European currencies while also limiting it's downside against commodity currencies. Focus now turns to FOMC minutes where Fed will likely hold an improved outlook for growth and economic recovery. Nevertheless, FOMC maintained the pledge to keep rates at historical low for an extended period of time.

Australian dollar maintained to gain against most major currencies after RBA raised rates by 25bps to 4.25% today as widely expected. The is the fifth rate hike in six meetings. In the accompanying statement, RBA Governor Stevens reiterated that interest rates to most borrowers have been somewhat lower than average, and since growth will likely to be around trend and inflation close to target over the coming year,it's appropriate for interest rates to be closer to average.

Aussie's strength against New Zealand dollar is particularly impressive. AUD/NZD jumps sharply to as high as 1.3229 today so far and is set heading to next key cluster level of 1.3319/46 (100% projection of 1.1925 to 1.2836 from 1.2408 at 1.3319 and 61.8% projection of 1.0628 to 1.2928 from 1.1925 at 1.3346.)

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EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3449; (P) 1.3494 (R1) 1.3527; More.

EUR/USD's break of 1.3381 support argues that recovery from 1.3266 is already completed at 1.3590. Intraday bias is flipped back to the downside for retesting 1.3266 first. Decisive break there will confirm medium term down trend resumption and should target 100% projection of 1.3817 to 1.3266 from 1.3590 at 1.3039 next, which is close to 1.3 psychological level. On the upside, above 1.3590 resistance will suggest that consolidation from 1.3266 is still in progress for another rise to 1.3817 and above.

In the bigger picture, EUR/USD's fall from 1.5143 has possibly completed the five wave impulsive sequence already (1.4217, 1.4578, 1.3443, 1.3817, 1.3266) on bullish convergence conditions in daily MACD and RSI. Some lengthier consolidation would now be seen with risk of stronger rebound. Nevertheless, we'd expect upside to be limited by 1.4217 cluster resistance (50% retracement of 1.5143 to 1.3266 at 1.4205) and bring fall resumption. The overall bearish outlook remains unchanged. That is, the three wave consolidation from 2008 low of 1.2329 has completed at 1.5143 already and fall from there is resuming whole down trend from 2008 high of 1.6039. Such decline is expected to break through 1.2329 low eventually.