width=180Moody's and other credit rating agencies have recently been cutting Spain's rating to near junk status. Spanish 10-yr bond yields rose to a record high of 7.02%, a euro-era high. This borrowing cost is an unsustainable level for Spain. Greece Ireland and Portugal have asked for bailout when their 10-yr yields rose to 7.0%.

Meanwhile, Italy conducted a bond auction in which borrowing costs also increased sharply.

the government managed to sell the maximum targeted 4.5 billion euros ($5.69 billion) in three different bonds amid decent demand, totaling €7.473 billion. (Marketwatch)

The euro sits steady ahead of the Greece election, with EUR/USD trading near 1.2570 at 7:30AM EDT. The EUR/GBP climbed above 0.81 but fell back to 0.8090 after the auction.

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Fan Yang CMT is the Chief Technical Strategist, trader, educator and a of the main contributors to FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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