EUR/USD (a 4-hour chart)
Cyprus crisis opened some precedents from which investors are more worried about the future of the eurozone believing that the crisis will continue.
PIIGS and Cyprus are unique to the majority of Euro-politicians. The same was with Greece, Ireland, Italy, Portugal and will soon happen with Spain.
The EU is changing the rules during the game. They area against investors, bondholders and even the depositors.
The euro fell on Wednesday, as the difficult economic and political climate in Cyprus and Italy made investors increasingly bet against the single European currency.
New signs that the political parties in Italy have difficulty in trying to form a coalition government after at last month's parliamentary elections, have put pressure on the euro. During talks with the Star, which was broadcast on the Internet, the Democratic Party leader Pier Luigi Bersani, said that "only a madman" can be tempted to run the country.
These comments caused a drop in the euro below 1.28 dollar for the first time since November.
In Cyprus, the government is preparing for the implementation of strong measures to control capital, as soon as the banks open. Government decree forbid citizens to withdraw from their accounts to more than 3,000 euros to travel outside the country, and all non-cash transactions outside Cyprus will be suspended for a week.
These uncertainties, as well as concerns about the expected new banking law of the European Union, caused a new wave of pessimism about the prospects for the euro area.