Once again, the EU is a prime target of bad news as Moody's downgraded Greece's debt by 4 notches, from A3 to Ba1, into junk status. This downgrade is a reflection that Greece could fail to meet its obligations of cutting its deficit and paying down its debt. Even with the rescue package set aside by the EZ and ECB, the lower rating is consistent with the risks associated with it -- noted Moody's. With the recent move against the dollar, the EUR/USD may retrace to 1.2133 before making another run higher towards the 1.24 level. It's also important to see how the EU reacts to this downgrade and if risk aversion will once again be the main theme of the market over the next few days. Tonight's economic data releases will be UK CPI y/y, German ZEW economic sentiment and US TICS data. We'll be trading these over the next 24 hours, please check the schedule if you wish to join us.

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