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EURUSD Daily Forex Analysis: Small Rise May Send Me Short

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I would love to see the pair rise to the 1.3735/50 in the next few hours. I would strongly consider adding a short position at that point. As far as the Greece thing goes, I think anything short of an outright bailout; will keep pressure on the EURUSD in the coming days. I don't know, it's a bit different situation then we have seen in the last few years. It was always assumed that the US would be coming out of the recession after everyone else. If this is really just the beginning of the European problem, and the Fed is now talking of raising rates rather soon, then the Euro may stay damaged as the USD gains toward the 1.2500/3000 level in the coming months.

My target for a move lower is in the 1.3600 area and could be reached in short order in the next few days. I say short order because of the statement above. I think anything less than a full bailout will not support the pair going forward. Markets will be looking for decisive, bold action from the ECB and its member countries to resolve the problem. I am of the belief that anything short of that and the markets will reward the USD by moving into cash and US treasuries.

On a short position targeting the 1.3600 area I would put my stop somewhere in the 1.3775/3800 area. The 1.3800 level was tested and not closed over 5 times, on the hourly chart, in the last 24 hours. A soft stop (a close above1.3800) may be appropriate. I will also be looking for a similar pull back on the GBPUSD toward the 1.5675/5700 level and then consider short positions at that time.