UPDATE:

The EURUSD is looking very heavy. Only a break above 1.3650 relieves pressure. My guess is that 1.3530/50 prints tonight. Do your own analysis. The move may very dramatic!

For some reason this morning the market has taken to hating the EURO again. Though I have not had time to read the news yet, I suspect it has to do with Goldman Sachs helping the Greek government hide its deficit. Now any national transactions they have had with the PIIGS are suspect. This could be a very defining few weeks in the currency market as the length and breadth of this issue is uncovered. There may be more debt that Greece is hiding, there may be debt from other PIIGS that will surface, all of which sends the EURUSD lower. For now though, the plunge may be over.

I warned yesterday that this move may happen. I was looking for more strength first but the entry point for that long was never approached. The entry for the short was though. In addition, the target for that short move was also hit. The black candle can be a super magnet sometimes and today only shows that power. The fifty points from 1.3650 to 1.3600 was covered in less than fifty minutes, with the majority occurring on one 5 minute candle. The tricky part is going forward. I still like a higher pull back in the pair before significant failures happen. Reread the first two paragraphs of yesterday's post for the targets and areas I will be looking to trade.

On the down side, should 1.3600 fail to hold, my target would be 1.3200. It’s an old, old target from 05/05/2009 but none the less legitimate. Now that the dotted line has been broken twice, it's effectiveness as support and Resistance has been watered down. Instead, look for price action to move along the 1.3600/50 region for the next few days. It's interesting that this significant drop wasn't accompanied by an Equities drop this morning. If equities hold up then we may find the pair back at 1.3750+ in the coming days. As far as trades, look elsewhere for now. Unless you are a Range trader, action may be a bit to choppy. A break of 1.3600 right now, just may not stick, but a move below 1.3550 may send me short for the above mentioned 1.3200 target.

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