Archived IMT (2010.11.30)

EURUSD BREAKS BELOW $1.30 amid concerns over the adequacy of the 85 bln plan to Ireland are fuelling the broad euro selling. The plan is more of a handout to Irish banks than a sovereign bailout. Unlike in the case of Greece, when the EUR 110 bln bailout was part of a shock-&-awe EUR 750 bln package from the EU and IMF, The EUR 85 bln is far from overwhelming. Out of the EUR 85 bln, EUR 50 bln goes to the sovereign and EUR 35 bln goes to the banks, EUR 17.5 bln of which is provided by Irish pockets (national pension fund). Renewed threats by opposition parties to block next weeks Budget is also disrupting the austerity continuity upon which the loan guarantees from the IMF are essential. THE ROAD TOWARDS $1.27 is further strenthened since last Tuesday when I first called this target following the break below ther 55-week MA. EURGBP breaks below 0.84, eyeing 0.8370 MA. 0.81 is the medium term target. As was warned 2 weeks ago, FX markets function on, good US data being positive for USDX partly based on the binary intepretation of Fed's QE2 explained earlier.