DAILY REVIEW 31 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. The FOMC Minutes this week will likely be the fuel for direction. 

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 (209pips) bull closing off the high on low vol<14weeks. The candle close and volume suggests more upside. 

DAY- The candle is a normal spread (117pips) bear closing on low vol>9days. The candle close and volume suggests more downside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: After the "rescue" of the Greek economy with the "Grexit" being avoided.... at least temporarily. The IMF has also stated that Greece will not be able to meet its debt obligations without some debt being forgiven and various FED officials reaffirming that rates would be raised this year with some voicing their concerns about inflation still being too low. Sentiment in the Eurozone remains poor with the French President 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 significant trapped short volume. 
Potential Fresh demand: 1.0912-1.0892, 1.10815-1.10800 
Potential fresh supply: 1.1105-1.1125, 1.1195-1.1213
Long (stop) orders: 1.0931-1.0923 (very low vol)
Short (stop) orders: 1.0963-1.0974, 1.0985-1.110, 1.1017-1.1041, 1.1080-1.1090, 1.2220-1.2234

Month-end flows are in play today pending the NFP next week and weekend events to come. Sentiment holds after the FOMC minutes with prices making a new low but has since retraced leaving lots of trapped shorts. SM is likely to test the 1.0965 before reversing. 

EU long levels: 1.10924-1.10915 

EU short levels: 1.10965-1.10975, 1.0991-1.1010, 1.1040-1.1050, 1.1078-1.1085, 1.1215-1.1230


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 (204pips) bear closing off the low on low vol<3weeks. The candle close and volume suggests no selling pressure.

DAY - The candle is a below average spread (80pips) bull "doji" closing on average vol<1day. 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 has traders trapped in both directions. Stop volumes are generally insignificant.

Potential demand stacks: 1.5580-1.5555, 1.5340-1.5330 (low volumes) 
Potential supply stacks: 1.5596-1.5605, 1.5667-1.567

Potential long (trapped) stops:  1.5597-1.5580, 1.5547-1.5540, 1.5515-1.5504, 1.5454-1.5445, 1.5400-1.5390, 1.5305-1.5295

Potential short (trapped) stops: 1.5607-1.5618, 1.5625-1.5635, 1.5680-1.5692, 1.5700-1.5710, 1.5717-1.5728, 1.5805-1.5815 

Prices retraced strongly after breaking out to make a new low yesterday displaying an expected whipsaw with traders trapped both ways. SM is likely to retest yesterday's high 1.5637 or higher before resuming the downward move. 

GU long levels: 1.5560-1.5550, 1.5515-1.5500, 1.5460-1.5445, 1.5403-1.5395

GU short levels: 1.5635, 1.5650, 1.5715-1.5725, 1.5797-1.5807

Posted at 02.53 am EST