The EUR/USD is tumbling towards 11/20 lows after breaking through October lows and surging towards 1.5140. Today's whipsaw movement comes in reaction to a broad-based exit from the risk trade in reaction to news from Dubai. As most investors know by now, Dubai World is requesting a debt restructuring of what could be up to $80 billion of credit. Although actual losses incurred are presently unknown, some European and UK banks could have considerable exposure. This week's news concerning Dubai's debt has shocked FX and equity markets as investors worry that the development may indicate forthcoming problems from other emerging economies. As a result, Asian markets have been under intense selling pressure, and European/U.S. equities look set to open sharply lower. Meanwhile, the FX markets are experiencing a broad based appreciation of the Dollar and Yen as gold crashes back below $1150/oz. Hence, it seems short-sellers have finally received the psychological trigger they were waiting for to unwind the bull-run in the risk trade. The question now becomes whether equities and currencies can stabilize before heading below more meaningful technical levels.

As for the EUR/USD, the Euro's present relative strength is helping the currency pair to hold up above 11/20 lows along with our 1st and 2nd tier uptrend lines. Wednesday's surge past October lows was a very bullish move, allowing the EUR/USD to weather today's storm thus far. As a result, both the EUR/GBP and EUR/AUD are performing rather well. However, the EUR/USD may be forced to follow suit should equities and other major Dollar crosses continue their downward movements. That being said, investors should keep an eye out for our 1st tier uptrend line should it be tested. Our 1st tier runs through November lows. Hence, a movement below the 1st tier may indicate a more protracted pullback towards the 1.460 area. As for the topside, the EUR/USD faces multiple downtrend lines once again along with the psychological 1.50 level.

Meanwhile, it will be interesting to see whether the S&P futures can recover some of their pre-market losses as investors digest the Dubai news along with Thanksgiving turkey. Despite the investor uncertainty spreading throughout the community at the moment, the ultimate sustainability of Dollar weakness and equity strength could likely rely upon next week's econ data along with the RBA's meeting late Monday EST and the ECB's central bank meeting on Thursday. Hence, the EUR/USD may be able to hold above 11/20 lows and our 1st tier uptrend line as investors await a confirmation from econ data and central bank policies.

Present Price: 1.4854

Resistances: 1.4860, 1.4886, 1.4904, 1.4920, 1.4946, 1.4970, 1.4999

Supports: 1.4843, 1.4826, 1.4808, 1.4797, 1.4771, 1.4754, 1.4723

Psychological: 1.50, November Highs and Lows

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