FXstreet.com (Barcelona) - Risk aversion has returned to the markets on a strong pace, on concerns that the end of the financial crisis is not yet on sight, and the Euro and pound have seen considerable declines, while the Dollar pared Friday's losses against the Yen

European markets are going through another negative session following declines in the main Asian markets with bank shares being affected the hardest, on growing concerns that Banks might not be able to face the enormous losses they have acquired. Eurostoxx 50 index is falling 2.69% and the German Dax index drops 1.83%.

On the macroeconomic front, Euro Zone's Sentix Investors confidence index has not brightened the spirits, as it has dropped well above expectations in March.

Pound and Euro tumble; USD/JPY back on track to 100.00

The EUR/USD has dropped all the way from session high at 1.2727, breaking 1.2600 resistance level and reaching a session low of 1.2575 so far. At the moment the Euro is trying to recover above 1.2600 but the pair looks bearish, and a test of 1.2540 support level should not be discarded.

The Pound has dropped across the board, on decline from 1.4582 intra day high, extends below 1.3955 (Mar 2 low), and the pair enters in the lowest levels seen since Jan 26, and falls straight towards 1.3800.

The EUR/GBP has rallied about 120 pips on the back of a widespread Pound weakness, and from intra-day low at 0.8950, the Pound has broken resistance level at 0.9074 (Feb 12 high), and if the pair manages to hold above here, the way towards 0.9130 (Jan 14 high) would be clear.

USD/JPY has rallied today against the Yen, recovering almost all the ground lost on Friday, and so far is crawling above 98.90 resistance level, on its way towards 4-monts high at 99.68, as Japanese current account deficit widened.