DAILY REVIEW 15 July 2015

EU Analysis:

EU: Perspective: Price has tested and broken through the 1.0500 which is simply a monthly low and psychological level with the next pyschological level at 1.0000 and the 0.9900 level being the breakout retest of a reaccumulation structure. Bias is still strongly down.  

MONTH- The candle is an above average spread (647pips) bear equal-bodied (same size of wicks) spinning top closing on very high vol<2weeks. This is absorption of selling. The candle close and volume suggests more upside. 

WEEK- The candle is a below average spread (299pips) bull closing slightly off the high on high vol>4weeks. The candle close and volume suggests more upside. 

DAY- The candle is a normal spread (119pips) bull "pseudo" upthrust closing on low vol<6days. The candle close and volume suggests no selling pressure.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: The continuing Euro-Greek saga places a lot of questions on the future of the Eurozone as its leaders must now find a solution for Greece acceptable to the other EU members following the referendum's "No" vote. Yesterday's meeting ended in an emphatic rejection of further aid without demonstrable reforms, which are demanded in the next few days before any consideration of further aid. Last week's FOMC minutes and Yellen's Q & A revealed a likely rate hike this year whilst acknowledging salient weaknesses in the jobs market not accurately reflected in the data. All this makes for an interesting trading week ahead.

The Oanda order book shows overwhelming net trapped short volume. 
Potential Fresh demand: 1.0924-1.0915
Potential fresh supply: 1.1080-1.1105, 1.1125-1.1135, 1.1200-1.1215
Long (stop) orders: 1.0965-1.0948
Short (stop) orders: 1.1007-1.1020, 1.1225-1.1235 

Selling pressure remains as markets remain risk averse following the Greek "rescue deal" as the Greek PM must still make good on passing the various legislation by today. The Oanda platform Net positions show a significant bulk of traders trapped short and not particularly significant net long or short stops level. SM is likely to induce selling to trap more shorts to 1.0977 or lower before reversing.

EU long levels: 1.0977-1.0965, 1.0925-1.0913

EU short levels: 1.1015-1.1025, 1.1052-1.1065, 1.1097-1.1115, 1.1126-1.1136, 1.1196-1.1215, 1.1235


GU Analysis:

GU: Perspective: GU has closed strongly past the last month's low 1.4633 and looks headed toward  the next monthly pivot 1.4225 monthly pivot which is the next possible level of support/demand. However, structures below and the close above 1.5550 indicate a return to the 1.6000 level and higher is quite possible. 

MONTH-  The candle is an above average spread (725pips) bear upthrust closing on very high vol>3months.  The candle close and volume suggests more upside.

WEEK- The candle is a below average spread (298pips) bear closing 2/3 off the low on very high vol<1week. The candle close and volume suggests buying.

DAY - The candle is an ultralarge spread (188pips) bull closing just off the high on average vol>4days. The candle close and volume suggests more upside.

Demand: Weekly/Daily:  1.4870 - 1.4812, 1.4229 Supply: Short term: 1.5574, 1.5600, 1.5619 

The Oanda order book shows a mix of traders trapped in both directions without any significant bias in retail trapped positions. 

Potential demand stacks: 1.5631-1.5606, 1.5594-1.5584
Potential supply stacks: 1.5698-1.5710, 1.5747-1.5757
Potential long (trapped) stops:  1.5554-1.5547, 1.5496-1.5480, 1.5450-1.5435, 1.5325-1.5317, 1.5305-1.5295
Potential short (trapped) stops: 1.5657-1.5670  

Prices have made a higher high to 1.5652 in Asia. Yesterday, I wrote "...likely to continue selling pressure to test the day low at 1.5450 or lower before reversing", true to form, yesterday's low was 1.5449 as SM used the UK news to induce shorts before taking them all out. SM is likely to fade weak longs to retest the key level 1.5600 or lower before resuming the upward move. 

GU long levels: 1.5600, 1.5580-1.5570, 1.5555-1.5545, 1.5480

GU short levels: 1.5650, 1.5700-1.5710, 1.5745-1.5758, 1.5791-1.5800

Posted at 01.04 am EST