EUR

The reason is very simple its power politics. Germany still wants to be Europe's ruling power.
They are in the Euro for the beer. That is EU is good as long as they buy german products.
Moreover, Germany has in absolute terms the highest debt in Eurozone. They need austerity measures as well. But slowly the voters wake up the gap between supporters and repudiators of the govts Euro politics widens in favor of repudiators. It is understood Ezone needs one financial dept, not 27.

Nope. The "Eurobond light" will come. Yield 2.5%. EUR up. There is no way out of the mess.

sounds to me like a direct capital infusions to the EU nations themselves is on the table.. both fiscal union and Eurobond unlikely.. so rumoured Euro TARP might happen sooner rather than later to fill budget gaps of PIIGS and support sick EU banks.. the better alternative is obviously default, defection and dissolution of the utopian EMU as we know it today.. EU countries which are not part of EMU like Poland which has been delaying EMU entry and also devaluating its currency lately must count itself very lucky indeed..

"..Tsy Sec Geithner, in interview with BBC Radio, says must help
EU leaders understand 'that markets are moving much more quickly than
they are moving, and these things have the classic dynamic that the
longer you wait the harder it is to solve, the more expensive it is to
solve, and there is a huge premium on early action.' Also says it is
important for the governments to escalate is 'so that they do not leave
the central banking carrying too much of the burden of responding to a
crisis.'.."

EURUSD selling @1.3605 but for now im buying

Euro May Drop to $1.30 CMC Markets Analyst Says