FXstreet.com (Barcelona) - Risk aversion has returned to forex markets and stocks have plunged on Asia while in Europe stock markets are posting losses from, 2.77% on the German Dax to 3.55% on the Eurostoxx 50. Furthermore, EU refusal to bailout Eastern European Banks plus news of further rescue measures for AIG and Citigrioup have extended the conviction that the financial crisis is far from over.

Macroeconomic data in the Euro Area has not been very comforting either, as Eurozone and UK's manufacturing sector's activity contracted at record lows in February, and UK consumer lending hit a fresh all time low. Eurozone' CPI estimate rose 1.2% year on year in February.

Euro and Pound hit by risk aversion

A fresh risk aversion wave has hit Euro and Pound, while the Dollar has gained some ground on bad news. EUR/USD has broken below 1.2655 support level and moving between 1.2570 and 1.2660 during most of Monday's Asian and European sessions weighed by the EU refusal to bailout Eastern European ailing banks. The Euro looks heavy and 1.2570 support level has been tested although it remains intact so far.

GBP/USD has broken below 1.4215 moments after the release of UK consumer lending, and manufacturing PMI data the pair has touched intra -day low at 1.4175, to recover mildly, and climb back towards 1.4215, the pair has been unable to reach past 1.4215 so far.

The USD rally from 89.82 (Feb 12 low) seems to have found a important resistance area at 98.72 (Feb 26 high), and the pair has opened a consolidation move. During Monday's Asian session, the USD/JPY has remained trading in a range between a minimum of 97.00 to a maximum level right below 98.00.