DAILY REVIEW 4 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 (198pips) bull closing near the high on high vol<1week. The candle close and volume suggests more upside. 

DAY- The candle is a below average spread (97pips) bull spinning top closing on low vol<6days. 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 are significant but stops remain quite far away.  

There are no planned major data releases today for the US or Euro. SM is likely to fade weak shorts to Friday's high 1.1169 or higher before reversing. I believe that the likely volume build action will be to test the highs as mentioned, reverse back to 1.070 or lower to reaccumulate and go long back towards Pre-Brexit levels, which is not inconceivable.

EU long levels:   1.1070, 1.1033, 1.1023, 1.0965, 1.0938, 1.0911

EU short levels:  1.1170, 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 (413pips) closing on high vol<2weeks. The candle close and volume suggests more downside. 
DAY- The candle is a small spread (104pips) bear spinning top closing on low vol<6days. The candle close and volume suggests more downside.

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 too thin to have any significance.

UK Construction PMI later today will likely result in a whipsaw. SM is likely to fade weak the weak shorts to around the 1.3330 level or higher before reversing. 

GU long levels: 1.3205, 1.3120 (no real demand levels as these levels are lower than the last 31 years)

GU short levels: 1.3330-1.3358, 1.3405, 1.3434, 1.3470, 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 02.14 am EST

DAILY REVIEW 1 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 (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 (130pips) bear closing about 2/3 above the low on average vol>2days. The candle close and volume suggests selling absorption. 

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:  There are still significantly more trapped short volumes in play with new profitable short volumes from 1.1100.  

Price action was crazy with month-end flows dominating yesterday as the SM took profits and retook positions. Yestarday's high 1.1154 may well be the new range high established. Trapped shorts below 1.1070 that have not been taken out yesterday will likely be holding positions unless price moves much higher. In order to do that, SM is likely to continue buying pressure back to yesterday's high 1.1154 or higher before reversing to taking profit and restock new positions at the 1.1023 level or lower. The Euro and US data will be the catalysts.

EU long levels:   1.1070, 1.1050, 1.1023, 1.0965, 1.0938, 1.0911

EU short levels:  1.1154, 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 (290pips) bear closing about 1/3 off the low on average vol>2days. The candle close and volume suggests selling absorption.

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 too thin to have any significance but the newly profitable shorts give a clue.

Yesterday's low 1.3205 is likely to be the re-accumulation level for the moment even as some forecasts have the GBPUSD at 1.2900 by year end. UK news later today will likely result in a whipsaw that will see shorts from 1.3350 taken out. SM is likely to fade weak the weak shorts to around the 1.3500 key level or higher before reversing. 

GU long levels: 1.3205, 1.3120 (no real demand levels as these levels are lower than the last 31 years)

GU short levels: 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 03.21 am EST