EUR/USD is trying to find support this morning as G7 finance ministers assemble today to primarily discuss Greece. European leaders along with US officials will discuss a potential funding solution for a Greece IMF payment that is due next week.
Price action on the EUR/USD -240 minute chart shows that current slide is tentatively finding support around yesterday’s low at around the 1.0860 zone. Earlier London, price rebounded towards 1.0920 before returning under pressure.
Since making a bearish butterfly pattern on May 15th, price has fallen below both the 100- and 50-day SMA(s). If downward pressure accelerates, key support will come from the March low at 1.0461. Major support will come from the 1.0188 – parity zone. A breakdown of that noted area could target further weakness towards .9840.
If we do see a relief rally from a Greek deal, immediate resistance will come from the 50-day SMA at 1.0958. Only a daily close above 1.1115 will invalidate the current bearish bias
The trade: Sell EUR/USD 1.0875, with a stop loss at 1.0925 and take profit at 1.0725. The risk/reward ratio is 1:3
Edward J. Moya
Senior Market Strategist
WorldWideMarkets Online Trading