Greece leaving the Eurozone? Markets show it. The EUR/USD trade setup.

Ever since the EUR/USD was breaking through the 1.40 mark I issued a short on this pair (see older posts). It seems to me the people of Greece had enough of the humiliation.
The overall problem is; the ripple effect it will have throughout the Eurozone and the world wide economy. Greece could be first and then maybe many more European countries. The Dow Jones lost another few hundred points today because of this news, a -297.05 to be precise. Time for a another shaky volatile market moment. This is the time you want to check the VXX (VIX) index before you make any sort of money market move, whether you are in Forex, Stock, ETF or in any other sort of trading)

As you can see at the chart above, the VXX shot up significantly, meaning we have to use extra caution for any trade that we may have in mind. The VIX is trading high at the moment, very high.

Now lets see what the forex trade looks like;

(click image for a larger version)

As always, we wonder, with this significant drop in price point, is the EUR/USD cheap to buy, or should we wait until it goes any lower? And if it does would a short position be more appropriate? A big fundamental chance has happened today to the currency pair and had such an impact that pretty much we should see what the markets decide what the right price should be - in other words, at the moment we rely heavily on technical analysis. And what does technical analysis show us at the moment? A severely oversold market that's for sure; as a matter of fact (and who knew that I would mention this) the EUR/USD is pretty cheap at the moment. I have a bullish outlook; all the way until the 1.40 mark again. So it's a buy past the 1.37 mark. The remarkle drop (shown in the yellow circle) made me come to this conclusion that a little bit too much panic was into play here.