Morning Report: Euro Pop & Drop On Greece Deal

Market Commentary  

EURUSD opened 80 pips lower than Friday’s close, gapping down for the third week in a row. The market remains choppy but the pair inched higher all morning, following the same trend as the past few weeks. With news of a deal between Greece and its creditors, EURUSD has jumped to 1.1197 so far, with details coming over the wires of a 50Bln Greek asset fund to be put in place by the Greek parliament, whereby the the Greeks must monetize state assets to cut debts and recapitalize banks in return for emergency funding. Expect EUR to be driven by headlines (though fatigue is setting in); trade in range of 1.1030 – 1.1230. Week ahead Euro-area Finance Ministers meeting (Mon); GE Jul ZEW; GE Jun CPI; EC May IP; EU Finance Ministers meeting (Tue); FR Jun CPI (Wed); EC May trade; EC Jun CPI; ECB meeting (Thu); EC May construction output (Fri).

GBP bounced nearly 200pips higher from its day low last Fri into the week/Fri close (1.5517) on hopes of Greece deal; this morning seen around 1.55 levels.  Week ahead brings BoE credit conditions & bank liabilities surveys (Mon); Jun CPI, PPI, RPI; ONS Jul house prices (Tue); May employment change, average weekly earnings (Wed).

USDJPY pushed lower, tested 120.41 briefly on 8 Jul on safe-haven flows following risk-off sentiments driven by the Chinese stock market rout and Grexit concerns. Pair has since recovered towards the 123-handle, but has since eased as the risk of Grexit has risen. Only a close below 120 would cast doubt over USDJPY’s medium-term bullish set-up. Quiet week ahead with just May industrial production (Mon); and BOJ policy statement/BOJ Kuroda press conference (Wed).

Technical  Commentary 

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

  • Focus remains on upside resistance at 1.1155, a break of this resistance opens a retest of key 1.1240/60 as we continue to oscillate in a contracting range trade. Downside breach of 1.09 should warrant a quick test of 1.08 bids. Trading condition remain choppy and headline driven.
  • Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology rotate around midpoints
  • Monitoring intraday price and Order Flow indicators on a test of 1.13 or 1.08

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

  • While 1.5550 acts as intraday resistance bears target a symmetry corrective target at 1.5285, below 1.5285 opens psychological 1.50 next. Over 1.56 opens retest of 1.58
  • Daily Order Flow bearish; OBV sideways, Linear Regression and Psychology bearish
  • Monitoring intraday price action and Order Flow indicators on a test of 1.5285 or 1.5550

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

  • Test of key 120 area attracts buyers and while this area supports expect retest of 122.50 from below above 123 targets 125.85 next and 128 in extension. Failure at 120 opens 119
  • Daily Order Flow bullish ; OBV sideways, Linear Regression and Psychology bearish but attempting to pierce midpoints from below
  • Monitoring intraday price action and Order Flow indicators on a test of 128 or 120

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

  • 133/34 support in range trade, breach of 133 opens retest of 2015 lows while above 138 opens 143
  • Daily Order Flow bullish; OBV sideways, Linear Regression and Psychology bearish but attempting to test midpoints from below
  • Monitoring intraday price action and Order Flow indicators at 138 and 133

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