DAILY REVIEW 1 August 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 a below average spread (245pips) bull closing near the high on low vol<1month. The candle close suggests more upside.  

WEEK- The candle is an above average spread (245pips) bull closing near the high on low vol<25weeks. The candle close and volume suggests a smart money fade and suggests more upside.  

DAY- The candle is a large spread (130pips) bull closing near the high on average vol>5days. The candle close and volume suggests more upside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: FED members still insist that rate hikes are still forthcoming but there is reason to expect that the FED should hold off any rate hikes for the time being. The ongoing purge in Turkey and terrorism in France and Germany are risk aversion and safety regardless of any pending rate hike by the FED. 

Oanda order book:  The trapped short positions are in play, these are likely the "die-hards" at lower levels and also the new shorts above 1.1150.    

We have the Euro and US data releases later today which will provide the catalyst for lower and higher prices. SM is likely to continue to fade weak longs to around the 1.1150 level before reversing to continue the upward movement

EU long levels:   1.1150-1.1140, 1.0950, 1.0938, 1.0911

EU short levels:  1.1200, 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. Brexit has already seen the United Kingdom's British Pound drop significantly. The key word here is "United" because of possible secession by the pro-EU countries, if both Scotland and Northern Ireland leave there will not be much of a United Kingdom and the ramifications that such secession will birth. The British Pound as we know it would then lose significant backing economic capital (land, people, resources, etc) and thus lose its value which is not inconceivable.

MONTH- The candle is a below average spread (685pips) bear "spring" closing on very high vol<1month. The candle close and volume suggests absorption of selling.

WEEK- The candle is a below average spread (245pips) bull spinning top closing on low vol<6weeks. The candle close and volume suggests no selling pressure.
DAY- The candle is an average spread (154pips) bull closing 1/2 off the high on low vol>1day. 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:  Volumes remain really thin but trapped shorts are more significant now and in play. 

Last Friday, I wrote "... SM is likely to push higher back to the 1.3300 key level." Well, it was exactly to the pip and whipsawed from there. SM is likely to push past the 1.3300 key level and higher before reversing.

GU long levels: 1.3210-1.3199

GU short levels: 1.3447, 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 11.48 pm EST