In recent months, we saw European economy responding to ECB measures and when everything seemed to be getting back to normal, news of Spanish PM Rajoy getting involved in corruption scandal spoiled the party. Market is looking more nervous and concerned, as former Italian PM Silvio Berlusconi is also tightening his belts for coming election due in few weeks time. Spain and Italy are the two major Euro-zone economies that can always unsettle the market condition due to risk factors involved. This development is something that may not be over in few days and could linger on for longer period of time and if I am correct then this could be good reason for long overdue correction of Euro and Japanese Yen or profit taking, whatever you may call it. Market will have to keep a close watch on European bond and flight of Capital to keep a track of trend. Spanish and Italian bond yield that made sharp jump on Monday will also be keenly watched. This is another good example that how vulnerable Euro can be, as it strength is largely due to window dressing and not because of genuine economic gains. Seriousness of the issue can be judged that German Chancellor Angela Merkel in a joint press conference in Berlin supported Mr.Rajoy's Spanish government that faces allegation of corruption charges. I am still wondering that why she had to step in advance in support of a government, which is blamed for taking bribe rather than opting to avoid until the Spanish Peoples party obtains clearance. I think she is probably aware of the consequences and knows lingering of this news could dent Euro-zones policy makers effort, but again could be confident too that Mr. Rajoy will fulfill his promise to disclose his tax return and financial asset this week. We could be heading for interesting week, as market could test Mr.Draghi's patience, since ECB has a monetary policy meeting on Thursday. Quite a few investors and banks are offloading their long Euro position. This could be the most appropriate time to challenge Draghi and test his real strength. I will not be surprised to see Euro taking a dive. Two major support level this week will be 1.3390 and 1.3270 that should hold or else 1.3150. However, on the upside a push above 1.3650 will help in easing the tension. Similarly, this situation may help US 10-year bond yield to rise that has gained 9 basis point from the highs of 2.06 pct. Gain is Us Treasuries could also help Japanese Yen that is looking for reason to correct. The levels to watch this week is 92.90, if does not penetrate beyond, tests and break of 91.50-70 zones will encourage for 90.20.