DAILY REVIEW 2 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 small spread (28pips) bear closing near the low on low vol<56days. The candle close and volume suggests no selling pressure.

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.    

There's not much Euro/US news today. A look at how the volumes are stacking up seem to suggest that structurally, SM is likely to reaccumulate for a push upward from around the 1.1140 level. SM is likely to induce more shorts at a retest of the lows at 1.1150 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 a below average spread (109pips) bear closing near the low on low vol<44days. The candle close and volume suggests no selling pressure.

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 are very thin with trapped shorts slightly more significant. 

We have the UK Construction PMI later. The worst UK manufacturing data in 3 years would suggest the possibility of stimulus measures sooner rather than later whilst still in the throes of Brexit. Whipsawing price action is now the norm more than anything. In this regard, we continue to prefer to look for short positions.

GU long levels: 1.3150, 1.3050

GU short levels: 1.3305, 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 1.14 am EST