DAILY REVIEW 15 July 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 (515pips) bear closing about 1/4 off the low on average vol>2months. The candle close and volume suggests absorption of selling.  

WEEK- The candle is a below average spread (183pips) bear closing near the low on low vol<3weeks. The candle close and volume suggests reduced selling pressure. 

DAY- The candle is a near-average spread spread (80pips) bull closing about 1/2 off the high on low vol>5days. The candle close and volume suggests more upside. 

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: The Brexit vote threw 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:  Trapped short volumes remain significant and in play.  

The EU CPI and US Retail Sales data will be released today. Yesterday, a FED Member reiterated the "limited" impact of Brexit and the continued commitment towards raising rates. SM is likely to fade weak shorts to retest the 1.1165 level or higher before reversing.

EU long levels:   1.1100, 1.1090, 1.1033, 1.1023, 1.0965, 1.0938, 1.0911

EU short levels:  1.1165, 1.1190, 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 an ultralarge spread (1897 pips) bear closing near the low on historical ultrahigh vol. The candle close and volume suggests more downside.

WEEK- The candle is a below average spread (549pips) bear closing 1/4 off the low on low vol<3weeks. The candle close and volume suggests reduced selling pressure.
DAY- The candle is a large spread (370pips) bull closing about 1/3 off the high on high vol>13days. The candle close and volume suggests more upside.

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

The Oanda order book: The volumes remain too thin to have any significance.

George Carney will be speaking later today. Still nothing to look for expect shorts at this time, possibly at the retest of the 1.3495 or 1.3533 levels. Volume is still super thin. 

GU long levels: no levels

GU short levels: 1.3485-1.3495, 1.3523-1.3533, 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 11.54 pm EST