Euro's recovery lost steam today on renewed concern over Greece situation as markets still see lots of uncertainty on implementation of the aid package for Greece. Spread between Greek 10-year bond and German bund yield surged again to 12 year high of 679 bps. CDS on Greece also jumped to over 700 bps. There are much voices from German that opposes to the aid package. Foreign Minister Guido Westerwelle said Berlin opposes handing over financial aid to Greece without Athens first presenting a credible program of debt reduction and the opinion was echoed by Free Democratic Party. Finance Minister Wolfgang Schaeuble called for speedy approval of the aid package, by May 19. However, opposition Social Democrats said they would not back an accelerated parliamentary process to approve the aid. German Chancellor Angela Merkel said Greece needs to show its budget is on a sustainable path and a full German agreement to a bailout may take a few days.

Sterling was lifted by election poll which showed that backing for the Conservatives slightly up, even though the overall result still show high chance of no majority win on May 6. Sterling recovered all of Friday's lost against Euro and EUR/GBP is back pressing 0.86 level. GBP/JPY is noticeably strong by taking out 145 level today to resume the whole rise from 132.13.

Elsewhere the Japanese yen remains uncertain pressure as risk appetite drives the market. AUD/JPY and CAD/JPY making new 2010 high earlier today which NZD/JPY is also strong, gaining over 1% so far. Dollar, on the other hand, is mixed. As noted before, dollar index made a temporary high at 82.07 last Friday and the development raised the possibility that consolidation from 82.24 is still in progress. A break below 81.04 will bring deeper fall towards 80.04 level to continue such consolidations. Meanwhile, break of 82.24 resistance is needed to confirm that medium term rise has resumed.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.3255; (P) 1.3327 (R1) 1.3453; More.

EUR/USD's fall today argues that recovery from 1.3201 might be completed at 1.3399 already and turns intraday bias neutral. While another rise cannot be ruled out, we'd continue to expect strong resistance at 4 hours 55 EMA (now at 1.3421) and bring fall resumption. Below 1.3201 will target 61.8% projection of 1.4578 to 1.3443 from 1.3817 at 1.3113 next. Though, sustained trading above the 4 hours 55 EMA will mix up the near term outlook and turn focus to falling trend line resistance at 1.3625 instead.

In the bigger picture, the break of 1.3266 support confirms that whole medium term decline from 1.5143 has resumed. As discussed before, 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. We'd expect fall from 1.5143 to break through 1.2329 low eventually. On the upside, break of 1.3691 resistance is needed to be the first signal of bottoming. Otherwise, outlook will remain bearish.

EUR/USD