DAILY REVIEW 21 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 an above average spread (368pips) bear closing at the low on low vol<2weeks. The candle close and volume suggests more downside. 

DAY- The candle is a small spread (62pips) bear reverse "hammer" closing on low vol<10days. The candle close and volume suggests no selling pressure.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Last week saw the "rescue" of the Greek economy with the "Grexit" being avoided.... at least for now. IMF has also stated that Greece will not be able to meet its debt obligations without some of it being forgiven. US Housing starts probably precipitated Gold prices falling to 2010 levels as the US Dollar gained traction. We had Yellen reaffirming that rates would be raised this year. Then of course, later we have the "caveat" from FED's Fischer that inflation is still too low. Sentiment in the Eurozone is not particularly great at the moment and the French President is now calling for a European "Government", something that is sorely needed if the EU is going to reinvent itself as monetary union in itself without fiscal union is going to be impossible in practice.

The Oanda order book shows significantly more net trapped short volume. 
Potential Fresh demand: 1.0700 (very low vols)
Potential fresh supply: 1.0933-1.0950, 1.0985-1.1000, 1.1025-1.1040, 1.1071-1.1095
Long (stop) orders: 1.0800-1.0780, 1.0770-1.0430, 1.0718-1.0705 (very low vols)
Short (stop) orders: 1.0862-1.0877, 1.0902-1.0911 

With Greece having made its first of many debt repayments to come... the market remains in a wait and see mode as there is no major news scheduled until tomorrow. SM is likely to continue the selling pressure to test the 1.0818 pivot or lower before reversing to take the weak shorts out and then plunge again.

EU long levels: None yet

EU short levels: 1.0860-1.0875, 1.0895, 1.0907-1.0920, 1.0970-1.0985,  1.1100-1.1005


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 sread (224pips) bull large body spinning top closing on high vol<2weeks. The candle close and volume suggests more upside.

DAY - The candle is a below average spread (89pips) bear spinning top closing on low vol<10days. The candle close and volume suggests no selling 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. 

Potential demand stacks: 1.5483-1.5473, 1.5459-1.5442, 1.5350-1.5337 (vols are very low)
Potential supply stacks: 1.5613-1.5621, 1.5645-1.5667

Potential long (trapped) stops:  1.5534-1.5513, 1.5440-1.5421, 1.5400-1.5382, 1.5328-1.5300

Potential short (trapped) stops: 1.5600-1.5610, 1.5623-1.5640, 1.5670-1.5690, 1.5705-1.5727 

With long stops nearer price and sentiment at its back, SM is likely to use the US Dollar strength to maintain selling pressure to retest the 1.5537 or lower before resuming the upward move. 

GU long levels: 1.5500-1.5485, 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 01.36 am EST