EURUSD: Euro breaking support, building downside momentum. Waiting on Greece vote

An early Europe squeeze to 1.1035 was as good as it got for the Euro today but still trading near its highs at the NY open. This changed when the above forecast US data (Industrial production rose 0.3% in June with Capacity utilization rose to 78.4%, PPI +0.4% after adding 0.5% in May. ) was backed up by some hawkish comments from both Janet Yellen and the Feds SF head, Williams, who both alluded to the fact that the Fed is likely to raise rates this year, possibly September.The cause of the Euro was not helped as the Greeks prepare to vote on the bailout package in parliament, with some resignations and also some growing unrest in the streets. We have to wait and see how that develops.

Today sees a busy day of data, highlighted by the ECB Interest Rate Decision, the EU CPI (exp0.0% mm, 0.2%yy, 0.8%yy Core), although no change is expected. Later in the day Janet Yellen will testify to Congress and further hawkish comments will most likely give the dollar another boost.

Technically, the Euro is breaking down through the 4 month  rising trend support off the March low (1.0461) and appears to be building the momentum for further downside action. The next points to watch would be close by, at last Tuesday’s 1.0915 low. A break below 1.0900 would then head towards the next major targets at the 1 June low at 1.0885 and then the 27 May low at 1.0818, beyond which the major lows at 1.0520 (13 April low) and 1.0461 (13 March low) could come under pressure.

The topside will now find sellers at 1.0965 (minor) and larger offers at 1.1000. A break of this seems unlikely today, but a bigger rally would take the Euro towards the session high where the 100/200 HMAs both lie.

Selling rallies still seems the way to go, although it may be until Yellen testifies that we see any real action.

Economic data highlights will include:

EU Trade Balance, CPI, ECB Interest Rate Decision/ Press Conference/Statement, US Jobless Claims, Philadelphia Fed Mfg Survey, Yellen Testimony.