So we saw the 1.2870 move that we were expecting into the New York close, followed by a swift 20-point decline back to the 50 level. The premise for being short EUR/USD is being tested at the extreme in this current push up and we will put the breaking point through the hourly downtrend line at 1.2890+. Anything above 1.2900 and yesterday's sharp 200-point move lower was merely a correction of the April-May uptrend. Or, if we stay below 1.2900, we must continue to stalk short trades.

The 13-minute chart shows the entry parameters of a 1.2875-1.2895 sell zone with recommended stops above 1.2905. Initial targets will be the New York morning session breakout level of 1.2840 and below that is the intraday uptrend channel support, which should come in at around 1.2825.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

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