Morning Report: Euro Highest Close in Two Weeks

Market Commentary  

USD down against majors, rates down as fears grow over global macro weakness; US 30 yr trades below 3%; credit, spread markets under strain. Copper and Oil continue to get bludgeoned, EURUSD highest close in two weeks; shorts tortured in 1.08-1.14 range; JPY firm with lower equity markets.

EURUSD traded firmly yesterday edging above 1.1000 level from 1.0920 area on signs of a resolution of Greece’s short term financial problems. Eurozone consumer confidence index fell by 7.1% MoM in July against down 5.8% expected.

GBPUSD dropped from 1.5658 to 1.5582 upon the release of UK retail sales, which unexpectedly slipped further to 4.0% YoY in June from an upwardly revised 4.7% in May, weaker than the expected 4.8%. Cable fell further to 1.5498 low during US trading on the decline of US initial jobless claims, which is the lowest level since November 1973.

USDJPY held steady and traded within the range 123.65 and 124.18 yesterday. According to the IMF Japan’s debt is unsustainable and could reach almost three times the size of its economy by 2030 unless the government does more to cut its budget. The BoJ should stand ready to increase monetary stimulus and provide stronger guidance to markets, as the IMF projects inflation won’t reach the BOJ’s target in the medium term.

Technical  Commentary 

EURUSD Short Term (1-3 Days): Bullish  – Medium Term (1-3 Weeks) Bearish

  • Test of the near term symmetry objective at 1.1030/50 is under way, a break here opens 1.1140/60 next. Below 1.0860 implies an end to the upside correction and focus shifts back to bids at 1.08
  • Daily Order Flow bullish; OBV sideways, Linear Regression and Psychology bearish but attempting midpoint test form below
  • Monitoring intraday price and Order Flow indicators on a test of 1.1040/60 or 1.08

eu2015-07-24 07_30_23-

GBPUSD: Short Term (1-3 Days): Bearish  – Medium Term (1-3 Weeks) Bearish

  • Third attempt to regain 1.57 fails a break back below 1.5550 suggests bearish symmetry target at 1.5285 remains in play only a close above 1.57 negates near term bearishness.
  • Daily Order Flow bearish; OBV sideways to down , Linear Regression and Psychology pierce midpoints from above but lack momentum
  • Monitoring intraday price action and Order Flow indicators on a test of 1.5285 or 1.5750

gu2015-07-24 07_33_23-

USDJPY: Short Term (1-3 Days): Bullish  – Medium Term (1-3 Weeks) Bullish

  • Bulls target 125.85 next and 128 in extension, expect intraday downside reactions to be supported at 123.50 only a failure at pivotal 122.50 concerns near term bullish view, failure here opens 120 in retest of ascending triangle trend line.
  • Daily Order Flow bullish; OBV sideways, Linear Regression and Psychology pierce midpoints from above.
  • Monitoring intraday price action and Order Flow indicators on a test of 128 or 122.50

uj2015-07-24 07_35_57-

EURJPY: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish

  • 133/34 range support continues to hold and price is now testing near term trendline resistance a break here targets a retest of 138, advance above here opens 143.
  • Daily Order Flow bearish; OBV sideways to up, Linear Regression and Psychology pierce midpoints from below
  • Monitoring intraday price action and Order Flow indicators at 138 and 133

ey2015-07-24 07_46_04-

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