EURUSD quieting down as the fireworks of midday have the market shell shocked

The EURUSD went up and tested the 200 bar MA at the 1.3840 level and was trading  within 10 pips of the high when the German denial of the Greece debt bailout surfaced, forcing the price back lower in an instant.  The price plunged stopped at 1.3756.  Right below, stood the 38.2% retracement of the move down from the high at 1.4026 to the low at 1.3586 which came in at 1.3753.  From there the price has settled in between the two extremes - between the Goal Posts as defined by the 100 and 200 hour moving averages.  I guess it is where it should be given the counterbalancing potential for the market at these levels.

Looking at the shorter term chart, the 100 bar MA on the 5 minute chart comes in at the 1.3758 level and this level will be watched on the downside for the pair along with the 1.3753 level mentioned above.  Clearly a break of both should lead to further downside pressure for the pair.  Additional support wil come against the 100 hour moving average, however.  That level currently comes in at the 1.3738 level.  

If the level below at 1.3753 and 1.3738 holds (100 hour MA) the price will likely flucuate between the Goal Posts (100 hour and 200 hour MA - green and blue line in the chart above) until that time the market is ready to break.

Overall, the move up today is positive. However, the debt situation is still not necessarily a great thing for the EU even if a bailout is granted. For one, it puts into question the integrity of the EU with regard to budget issues and two, if a bailout is made, what about Spain and Portugal and Ireland should their situation require a similar move.  Also, there is already unrest in Greece with strikes planned and tax rates are already by comparison at the high side.  All of which paint a uneasy picture and this may ultimately be the focus going forward. 

Fundamentals are one thing, however, it is the charts which will tell the story (and follow the fundamental story).  So watch the clues from the charts and keep a close eye on risk.  The moves today show the importance of knowing your risk and using stops to avoid large, unexpected  losses.