As suspected and as is common, the EUR/USD is testing the $1.30 level

Why there would be a test of this important level on probably the most inactive day of the year is strange, I don't know if I should read in to it much or not, but there it is as expected.

With stocks, the head fake probability is usually very high in which the $1.30 test would appear successful at first and then fail after longs were sucked in, on a day like today, there's not many traders to suck in. The fact $1.30 has broken twice is not going to be taken well by FX traders who are trading on huge leverage and account sizes. Betting long on the Euro now s kind of like trying to catch the proverbial falling knife. LTRO is a disappointment, the banks are running scared and parking cash at a .75% loss rather then engage in a carry trade where they could actually make some money, which tells me they have little confidence in the solvency of the PIIGS. Of course and bank/investment bank's risk department as well as shareholders would probably have some probing questions for any trading desk buying 7% 10 years. Look at what happened to MF-Global.