Having closed the Friday session less than 1 pip above the hugely important 1.2000 level below which there lay many stops, following this weekend’s news onslaught which seemed like a deja vu of the newsflow from the fall of 2011, where the main catalyst was the Reuters report that Germany is preparing to let Greece go once and for all (with the subsequent attempts at retraction barely noticed), or maybe just because someone wanted to price in a little more of the more than fully priced in by now ECB QE – which very well may not happen – the moment the EURUSD opened for trading it took out not only the critical 1.2000 stops, but within milliseconds the Euro found itself bidless and crashed to a low of 1.1864, promptly taking out the lows set in May 2010 when the first Greek bailout took place, and tumbled to a level not seen since March of 2006!

Following the initial collapse the Euro did stage a modest comeback, but even the dead cat bounce appears to be fading and at this rate Mario Draghi will have no choice but to reprise his July 2012 “whatever it takes” melodrama or else any bank, pension fund or institution that is still long the EUR may not make it past tomorrow’s margin calls.

Paradoxically, in the newer-normal, EUR weakness which implicitly means USD strenght, the plunge in the Euro means another spike in the USDJPY to which all the E-mini algos are correlating, so in the off chance that the EUR collapses to parity, sending the Yen crashing to Albert Edwards’ 135 level, may be just what the market needed to finally hit Goldman’s 2015 year end target of 2200 a year or so early.