The headline in the WSJ (online) reads: "EU Leaders Agree on Support for Greece," but the sub-header tells us that "Euro-zone countries will provide coordinated action if needed to preserve stability." Ok, then... Let's look at the reaction of the Euro to this "agreement" to provide a financial assistance package to Greece: where IS the reaction? I certainly don't see one. Technically, EUR/USD remains in its 5-session range between Fri.'s low at 1.3585 and the high for the recovery rally at 1.3840, which right now has the look and feel of a sideways, bearish congestion area ahead of downside continuation.

Bullish for the PowerShares DB US Dollar ETF (UUP). At this juncture, only a sustained climb above 1.3840/50 will trigger initial signals that a near-term low is in place. Otherwise, the EUR/USD likely will head considerably lower, which WILL get the attention of EU leaders AGAIN, and will compel them to actually DO something. Unfortunately, politicians ONLY spring into action WHEN FORCED -- and that usually occurs when the markets are into panic mode. Let's see when that starts, with the EUR plunging towards 1.3400.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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