Not much commentary necessary.
The gap-up on news of a loaded gun on the table was a terrific selling-on-strength point and the 50DMA breakout did not hold. Look for continued weakness in commodities and be watching for a quick trip down to last month’s lows on the EUR/USD and even lower, unless something is done to drive markets to send the EUR/USD sustainably through its 50DMA.
Greece is not the only issue driving the Euro down. Indeed, a coordinated and executed bailout of Greece would not end Euro selling, besides in the short term. Contagion risk is increasing, as new DTCC data shows an exodus of CDS specs from Hellenic Republic and the periphery and massive derisking in Spain and France.
If a lower high can be made in the EUR/USD, a break through the 50DMA could be a great short/intermediate-term buy point. But for now, the trend is down, and the price action since the gap-up on the 11th has been very bearish.
Courtesy of BCA: