DAILY REVIEW 16 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 (105pips) bear closing near the low on low vol<7days. The candle close and volume suggests more downside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: The Greek parliament passed the austerity measures yesterday and the Molotov cocktails began flying in Athens. The IMF's disagreement with the EU's bailout package only exacerbates the tension. To put it bluntly, the IMF's view is that the package simply kicks the can down the road as there is no way that Greece will ever generate enough to repay the debt. It is akin to asking a Flyweight boxer to be extremely disciplined, train very hard but he is taking on a Heavyweight boxer. It is simply no contest even if he can run and duck some of the hammer blows, over time, he will be knocked out. FED Chair Yellen simply repeated her earlier views that the FED will be tightening this year. The rate cut by the Bank of Canada was probably the catalyst for the US Dollar being back in favour. 

The Oanda order book shows overwhelming net trapped short volume. 
Potential Fresh demand: 1.0934-1.0911, 1.0827-1.0817, 1.0809-1.0795 (very low vols)
Potential fresh supply: 1.1022-1.1035, 1.1085-1.1110, 1.1198-1.1213
Long (stop) orders: 1.0909-1.0892, 1.0763-1.0711
Short (stop) orders: 1.0986-1.1005,1.1033-1.1044,1.1228-1.1242 

Riots in the streets of Athens does not bode well for sentiment. Prices have pushed past the 1.0915 pivot (7 July 2015) and prices now reversing as SM fade weak shorts. The Oanda platform Net positions show a significant bulk of traders trapped short and significant net long/short stops level. SM is likely to continue fading weak shorts, shoring up their own sell positions to ride on sentiment to push lower, likely to 1.0988 or higher before reversing to test the new low of 1.09111.

EU long levels: None yet

EU short levels: 1.0988-1.1005,  1.1025, 1.1055, 1.1085-1.1103, 1.1198-1.1213, 1.1232-1.1240


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 a normal spread (98pips) bear near "doji" closing on low vol<3days. The candle close and volume suggests no buying pressure.

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: 1.5498-1.5488,1.5460-1.5445 (vols are very low)
Potential supply stacks: 1.5686-1.5700, 1.5740-1.5755, 1.5792-1.5802, 1.5880-1.5902

Potential long (trapped) stops:  1.5600-1.5589, 1.5570-1.5557, 1.5550-1.5530, 1.5441-1.5427, 1.5397-1.5388, 1.5320-1.5311, 1.5300-1.5288

Potential short (trapped) stops: 1.5640-1.5651, 1.5665-1.5680, 1.5714-1.5727 

Prices made a higher high to 1.5674 yesterday before retracing on US Dollar strength. Oanda Retail Fx positions show newly trapped long volumes. SM is likely to use the US Dollar strength to fade weak longs to retest the 1.5600 or lower before resuming the upward move. 

GU long levels: 1.5600, 1.5570, 1.5550, 1.535-1.5530

GU short levels: 1.5650, 1.5675, 1.5700-1.5710, 1.5745-1.5758, 1.5791-1.5800

Posted at 00.51 am EST