US Dollar Over Valued

The USD index has rallied back to session highs near 82.35 as Greek worries are once again weighing on the euro.

EUR-USD is -55 pips at 1.2530 as uneasiness over the possibility of Greece exiting the single currency continues to dictate trade.

The latest polls suggest 85% of Greeks would like to remain in the euro, and that 30% support the Syriza party.

Today's selling has dropped the single currency to its worst levels since July 2010 with many now eyeing the possibility of a test of the 1.2000 area.

Eurozone data is limited to GfK German Consumer Climate. GBP-USD is -35 pips at 1.5655 as trade tests critical support in the area.

Sterling has been under pressure the past couple of sessions after the latest Bank of England MPC minutes suggested the central bank's asset purchase program may be on pause instead of completed as some had suggested.

A break of the 1.5650 level will have traders eyeing the 1.5300 area. USD-CHF is +50 pips at .9590 as action holds at levels not seen since February 2010.

S Treasuries finish with light losses

10-Yr: -04/32..1.766%.. USD-JPY: 79.60.. EUR-USD: 1.2526

Treasuries across most of the complex closed lower, but most finished within a couple of ticks of their respective flat lines.

Weak economic data around the world was unable to spark a new leg of buying in the complex as traders continue to lighten up their loads after the recent run higher.

This afternoon's $29-B 7-yr T-Note auction drew a record low at-auction yield of 1.203%, and saw an in-line 2.80x bid/cover.

The complex moved off its worst levels in late trade on reports that China's banks will miss their loan targets for the year.

A small drop of 2/32 saw the 10-yr T-Note ease to 99 29/32 as its yield finished at 1.759%. Today marked the ninth consecutive session the benchmark yield finished below what is now 1.80% resistance.

The Long bond under performed as a 16/32 decline dropped it to 102 30/32. Selling made for a surge of more than 5 bps in yield to 2.847%.

The yield curve swung steeper as the 2-10-yr spread widened to 146 bps.

Economist Shayne Heffernan of www.livetradingnews.com Market Outlook

EUR-CHF is flat at 1.2010 after seeing a spike to the 1.2075 level on rumors of central bank intervention.

The cross gave up its gains after the rumors failed to materialize. Swiss employment will be released tomorrow.

USD-JPY is +5 pips at 79.55 during a rather quiet session. Traders continue to eye support in the 79.00 area with a breakdown likely leading to the long awaited test of the pair's 200-Day Moving Average near 78.55. Tokyo's Core CPI is due out tonight.

AUD-USD is -20 pips at .9730 as action moves lower for the sixteenth time in the past 19 days.

The hard currency has lost almost 800 pips during its recent slide, and is now testing the critical .9700 level.

A breakdown would likely produce a test of the 200-Day Moving Average at .9100 with .8700 a distinct possibility.

USD-CAD is +40 pips at 1.0285 as action holds just below the 2012 highs. The pair has rallied roughly 500 pips since the beginning of May, and looks like it wants to test resistance in the 1.0350 area. Solid support lies in the 1.0050 area if some selling emerges.