Morning Report: Greek Saga Drags Ahead Of Draghi Speech

Market Commentary  

There was more Greek drama over the weekend as negotiations on Greece’s bailout terms ended with a deadlock again as Greek officials and creditors failed to produce any compromise. The increasing expectations of default caused some nervousness in the markets as the payment date on 30 June of 1.6 billion euro inches closer. EURUSD gapped down from NY close at 1.1265 to 1.1211 in the first hour of Asia open. The pair seems to be trading heavily this morning around the 1.1200 handle with a near term support at 1.1185 and 1.1150 levels respectively. The topside resistance levels are 1.1225 and 1.1275 respectively. Markets expect a volatile week for the pair and are ready to act on any headline news. We also look forward to a speech by Draghi today as well as FOMC on Wednesday which would most likely bring the pair out of the current range.

GBPUSD continues to trade bid, and reacted well in spite of S&P revising its outlook from negative to stable for the UK. The rush of domestic economic data and risk events (i.e. CPI, employment, BOE MPC minutes, retail sales) should provide some good volatility this week. Cable ended last week above the psychological 1.55 level, and a dovish FOMC result could see the pair target the May highs of 1.5815.

TPP negotiations encountered a roadblock on Friday after the US congress rejected the TAA bill, which was a necessary component to fast ­track negotiating authorities. This, along with the breakdown of Greece ­EU talks in Brussels over the weekend, could put a damper in risk sentiment. More significant risk events are back ­loaded in the week (FOMC, BOJ), so anticipate some consolidation inside a broad 122.50­124.20 range in the next few sessions. Expect 123.50/60 to be the first level of resistance, followed by 123.85/00. Support at 123.10/00 initially. EURJPY has gapped lower this morning, and looks poised to test 137

Technical  Commentary 

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

  • While 1.14 contains the advance focus shifts to bids at 1.12 a failure here opens 1.1050. A break of 1.1465 opens an initial symmetry target at 1.16
  • Daily Order Flow bullish ; OBV sideways to down, Linear Regression pierces midpoint from below, Psychology bearish but lack momentum
  • Monitoring intraday price and Order Flow indicators on a test of 1.16 or 1.1050

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

  • While 1.56 area contains the upside advance bears require an erosion of 1.5450 support to target 1.5350 next, while 1.5450 supports expect retest of 1.5815
  • Daily Order Flow bullish; OBV sideways to down , Linear Regression and Psychology bullish
  • Monitoring intraday price action and Order Flow indicators on a test of 1.5050 or 1.56

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

  • 122 pivotal support while 123 contains downside expect test of 125, failure at 123 opens 122
  • Daily Order Flow bearish ; OBV sideways, Linear Regression and Psychology bearish but attempting midpoint test from below
  • Monitoring intraday price action and Order Flow indicators on a test of 128  or 122

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

  • While 141.75 area caps the advance look for a retest of 137 as potential base for next leg higher for symmetry swing objective at 143.60’s
  • Daily Order Flow bearish; OBV down, Linear Regression and Psychology bearish
  • Monitoring intraday price action and Order Flow indicators at 141.75 or 137/36

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