Summer Friday + Greece + London/Europe closed + Yellen = Higher RISK

At 12:30 PM FOMC Chair Yellen will be speaking on the US Economic Outlook in Cleveland. Next week she speaks on Capitol Hill. Focus will shift from the developments on Greece but if you add up a summer Friday (less liquidity) + Greece (weekend risk with that still) + London/Europe closed + Yellen talk on the economy, that equals HIGHER RISK. Market risk, event risk and liquidity risk will be at high levels.

So expect the market to reflect this development.

What can that mean?

The London fixing at 11 AM ET can cause some volatility. You never do know with that but given the weekend risk, there is always the chance for squaring up flows.

Technically, for the EURUSD the price has corrected to the 38.2% of the last leg higher at 1.11625 (see earlier post). In the process, the trend lines outlined earlier have be breached. This slowed the trend higher .

On the downside, traders will now look toward the 100 bar MA at 1.1155 and the 50% at 1.1146. If the fixing flows do not cause a huge move - and if this area can hold support - those targets would be a lower level to define bias through Yellens comments - move below = more bearish. Stay above = more bullish.

The 200 bar MA on the 5 minute chart (green line in the chart at 1.11179 currently) will be another level to eye for bias clues after the chairs remarks. If the comments pave the way to September tightening, that will likely solicit a reversal lower and a move back below this level.

If she is more dovish/stays ambiguous on when, new highs (1.1215) will be eyed with the 1.1236 the next area on a break above the days highs.