Morning Report: Greek Parliamentary Outcome On Watch

Market Commentary  

USD rally stalled following weaker than expected US retail sales, negative import prices. DXY was only briefly above 97-levels before easing to close 96.65 levels overnight. Key focus today on Fed Chair Yellen’s semi-annual testimony (Wed-Thu); watch for signal/hint of timing of tightening. Expect Yellen to reiterate her recent speech last Friday that first rate hike to be sometime this year.

EUR was little changed overnight. Concerns remain if Greek parliament manages to pass legislation on the set of measures imposed by the Euro-group/Institution . Worries over political backlash from Greek PM Tsipras’s own party raises the risk of government reshuffle or even early elections. Meantime capital controls and ECB’s ELA cap remain in place till progress is seen. Expect 1.0940 – 1.1060 range ahead of Greek parliament outcome.

GBP was a big gainer overnight, rising sharply towards 1.5653 high on BoE Carney’s comments at the parliamentary committee session yesterday – timing of first rate hike was “moving closer”. This was perceived as a hawkish tilt. He did go on to say this was counterbalanced by disinflationary pressures. Indeed UK Jun CPI printed a soft read yesterday.

USDJPY bounced from overnight lows of 122.92 following the weaker-than-expected US retail sale print but appears set to take a breather this morning as BOJ policy decision came in as widely expected unchanged focus now shifts to updated quarterly BOJ economic projections as well as Governor Kuroda’s press conference.

Technical  Commentary 

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

  • Continue to oscillate in a contracting range trade with a bearish bias. Downside breach of 1.09 should warrant a quick test of 1.08 bids. Trading condition remain choppy and headline driven, intraday while 1.11 caps upside reactions expect further downside pressure only above 1.1240/60 concerns immediate bearish bias.
  • Daily Order Flow bearish; OBV sideways to down, Linear Regression and Psychology rotate around midpoints with bearish bias
  • 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): Bullish  – Medium Term (1-3 Weeks) Bearish

  • With 1.56 offers eroded price is retesting the ascending trendline from below as potential resistance, while 1.57 caps upside bearish symmetry target at 1.5285 remains in play a close above 1.57 negates near term bearishness and resets focus on the 1.60 upside psych objective.
  • Daily Order Flow bullish; OBV sideways to up, Linear Regression and Psychology test midpoints from below
  • Monitoring intraday price action and Order Flow indicators on a test of 1.5285 or 1.57

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

  • Above 123 targets 125.85 next and 128 in extension. Failure at 122 again opens 120 in retest of ascending triangle trend line
  • Daily Order Flow bullish; OBV sideways, Linear Regression and Psychology pierce midpoints from below
  • Monitoring intraday price action and Order Flow indicators on a test of 128 or 120

uj2015-07-15 07_33_18-

EURJPY: Short Term (1-3 Days): Bullish – 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 to up, Linear Regression and Psychology attempting to capture midpoints from below
  • Monitoring intraday price action and Order Flow indicators at 138 and 133

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