DAILY REVIEW 29 June 2016
  

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. December's candle suggests a retracement is in progress and January's candle is an "inside" of the December candle while February's candle also closed back inside the January range. We also note that there are no significant orders/ stops lower until the 1.0000 key level. Bias is still strongly down from a market structure perspective.    

MONTH- The candle is an above average spread (518pips) bear closing at the low on low vol<9months. The candle close suggests more downside.  

WEEK- The candle is a below average spread (171pips) bull spring closing on high vol>6 days. The candle close and volume suggests buying. 

DAY- The candle is a below average spread (101pips) bull closing about 1/2 off the high on low vol<3days. The candle close and volume suggests no selling interest. 

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: The Brexit vote last week has thrown markets into a tailspin. Market positioning will take this into account including the FED's expected rate hikes. Bearing this in mind, the latest 5-10 year inflation expectation was reduced from 2.5% to 2.3% is even more reason to expect that the FED should hold off any further rate hikes for the time being. Overall USD strength/weakness now in the wake of the pro-Brexit poll is likely to be transient until significant US data show clear improvement. Market sentiment in the meantime supports risk aversion and safety regardless of any pending rate hike by the FED.

Oanda order book:  The volumes have significantly more trapped shorts in play.  

Prices remain an "inside day" of last Friday. Euro meeting and US data later today will be the movement catalyst. Prices spiked to the 1.1100 handle and strongly retraced giving a sell signal to candle stick traders. SM is likely to fade weak shorts back to the 1.1100 key level or higher before reversing.

EU long levels:   1.1050, 1.0965, 1.0938, 1.0911

EU short levels:  1.1100-1.1110, 1.1121, 1.1175, 1.1270, 1.1314, 1.1366-1.1373, 1.1391, 1.1422, 1.1452, 1.1485-1.1491, 1.1500-1.1510, 1.1520-1.1525, 1.1532, 1.1580, 1.1600, 1.1615, 1.1619-1.1630, 1.1711

GU Analysis:

GU: Perspective: GU has closed below April pivot 1.4564. The June close of 1.5701 becomes important as a supply level to overcome for higher prices. The downward bias is still dominant. 

MONTH- The candle is a below average spread (437pips) bear spinning top closing on high vol<3months. The candle close and volume suggests selling.

WEEK- The candle is an ultralarge spread (1792pips) bear large body spinning top closing on historical ultralarge vol. The candle close and volume suggests more downside.
DAY- The candle is a below average spread (218pips) bull closing about 1/3 off the high on low vol<3days. The candle close and volume suggests no selling interest. 

Demand: Weekly/Daily: not applicable after 31 year low broken through Supply: Short term: 1.5574, 1.5600, 1.5619 

The Oanda order book: Volumes are still too thin to have any significance.

Prices have pushed higher today with no real basis for wither up or down as can be expected. SM is likely to fade weak shorts to Monday's high 1.3450 level or higher before reversing. 

GU long levels: 1.3120 (no real demand levels as these levels are lower than the last 31 years)

GU short levels: 1.3465-1.3470, 1.3655, 1.3695, 1.3711, 1.3779, 1.3815, 1.3837, 1.3874, 1.3928, 1.3974, 1.4569, 1.4685, 1.4830, 1.4925, 1.4977, 1.5000

Posted at 04.32 am EST