Remain Short EURUSD; Pending USDJPY, USDCHF

Yesterday I shorted the EURUSD at 1.3100, and as of late, price action has moved in my favor to test the 100-day SMA for support. The pair is now at the crossroads and next moves will be critical for the euro. The 100-day moving average coincides with the broader range which has remained intact since June, and indeed, a break below the lower bounds of this channel will expose downside risks towards 1.2500 and beyond. However, failure to make a clear break underneath 1.2700 may lead to corrective retracement. As my overall bias is to the downside, I will maintain my short position. From a fundamental standpoint, I believe that Greece will continue to place downward pressure on the euro. Today, the indebted nation released its unemployment rate for the month of May in which figures rose to 12.0 percent amid economists forecasting the rate to fall to 11.6 percent from 11.9 percent in April. At the same time, Greece’s economic activity fell more than expected in the second quarter. Meanwhile, Reuters reported that Slovakia refused to participate in the euro-zone bailout of Greece. This proves that everything is not under control, and the worst from Greece may not be behind us. All in all, I will remain short from 1.3100, with a target of 1.2500, and a stop at break even.

Taking a look at the USDJPY, price action has pared yesterday’s decline and is now testing the 10-day SMA for resistance. I will continue to monitor the pair and look to enter a long position with a clear break above the descending range dated back to June. Until this trend is broken, I do not rule out downside risks back towards the 15 year low as retail traders continue to look for a corrective bounce in the pair. With reference to the USDCHF, after breaking below the 200-day moving average, the pair displayed a lackluster performance before pushing lower. Price action will likley be capped by this level in the near term. I will look for a test of 1.0660 before entering in a short position. Good luck trading!!!