The Euro's been one hell of an instrument to trade ! Yesterday's weakness was a result of negative comments coming out of Eastern European economies.. esp Hungary. News has it that the IMF steering committee head indicated that the IMF is underfunded compared to its bailout commitments.. and senior IMF officails are 'unofficially' visiting Hungary..
Euro has been taking support at 1.2150 for quite some time.. a decisive move below 1.2150 on EURUSD, 110 on EURJPY and above 1.42 against the CHF will indicate crisis part II is beginning.. untill then, we're in no man's land. One can speculate (as indeed I am inclined to) that the levels will break, but when is anybody's guess. Further, a sharp sell-off in risk assets will happen only if the breakdown is a step function (as opposed to an orderly decline that the ECB might want to see).