A hard deadline looms for Greece, with payments to the IMF due by 30th June. Default of some kind is looking more likely, yet EUR/USD is going through another bought of strength. The recent rises put the pair at a point where traders may wish to start scaling into a short position, despite a short term uptrend on the daily chart.
A weaker USD following a dovish statement from the FOMC last week may also be contributing to the rise. Its possible that some European investors are calling back international investments in anticipation of a market disruption, lending further support.
However, the "big picture" in my view is pointing to significantly lower levels for EUR/USD. European growth rates appear anaemic, in contrast to the USA. The ECB is pumping Euros into the global monetary system. The US Fed could lift interest rates this year. Frankly, Greece is too small to make an economic difference, but it could trigger a sentiment swing.
For these reasons, and more, I want to be short EUR/USD ahead of tonight's emergency meeting of Euro area politicians. However, given EUR/USD's demonstrated ability to defy gravity, I'll use a staggered entry, allowing down moves to confirm I'm trading in the right direction. Here's a plan:
1) Sell now, with a stop loss above 1.1450
2) Sell on a breach of the daily up trend, around 1.1300
3) Sell on a breach of the parabolic SAR, currently around 1.1195
The first target is the recent low around 1.0820, and then the historic low closer to 1.0495.