The EURUSD came off the highs and slowed the ascent. The price did not necessarily hit any key target on the upside (1.2725 is my next key target followed by 1.2744), but seems to have simply run into some sellers. The days range is currently 260 pips. This is the largest trading range since November 30th 2011 (275 pips).   Yields are down on Spanish and Italian 10 year bonds, but on June 1 the 10 year Spanish bond was at 6.53. It is now close to that level at 6.47. The EURUSD closed at 1.2417 on June 1.  It is 220 pips higher now at 1.2677 currently.  Italy 10 year yield are actually higher at 5.863 vs 5.739 on June 1.  Of course traders often react on what happened lately, so there is no doubt yields are down, so price of the EURUSD is up.

The Correction Zone off the high comes in currently at the 1.26216-1.2638 (see chart below).   If you recall, the low from January 13, 2012 came in at 1.2623.  This level had some significance at the end of May and early part of June.  Today when the price moved higher, it stalled at the 1.2625 and corrected. When the price moved back higher, the price broke above this level and accelerated to the upside (see chart below).  With the 50% of the last leg higher coming in at 1.2621, this area will be a key level should the correction lower continue today.

Traders who are long are still in control.  I would think that stay above the 1.2621-23 and buyers are comfortable.  A move to the 1.2726/1.2744 and I will be looking for willing sellers.  A break above 1.2744 and the buyers should push higher.  The range for the day is high, but week end/month end/quarter end can cause supply/demand flows that can be unusual.   So risk is more as a result.