Morning Report: Greece Deal Gaining Momentum

Market Commentary  

All eyes will be on the emergency EU summit today. Greek Prime Minster Alexis Tsipras made a counter proposal on Sunday to its creditors, hoping to break the deadlock before Athens runs out of cash. Euro appears bid this morning as EU official calls the proposal “good basis for progress”, increasing expectation for a break though. The immediate resistance level is the key 1.1485­ 1.1500 pivot level if an agreement is reached. However, the topside might be capped as the 1.6 billion euro payment to IMF on 30 June is the first hurdle before another 3.5 billion euro bond held by ECB matures on 20 July. The near term downside support levels are 1.1325 and 1.1250 respectively with further downside if negotiations fail as markets panic. We’ll keep our eyes on the wires today as euro will be sensitive to developments over Greece as the clock ticks.

It’s all about Greece at the moment ahead of a quiet data week for the markets…. USTs found a bid tone on Friday ahead of the weekend as the bank runs in Greece have been worse than expected. This helped push USDJPY to test its 122.45/55 support area once again, interbank reports suggest notable real money supply adding to pressure. Weekend developments and hopes of a resolution have stabilised the pair for now, but it continues to trade top ­heavy ahead of the 123.20 resistance area. Market remains bullish unless this 122.45 level breaks convincingly.

GBP continues to outperform and perhaps showing some safe haven qualities as we traded above 1.5900 overnight. The rally in Cable which many have missed is also an indicator of the broad dollar weakness post FOMC where USDJPY has also remained heavy in G4. So data and a somewhat cautious Fed has allowed the pair to stay supported but the question is whether the rally is sustainable in the near term. It would be hard to recommend chasing Cable above 1.5800 and a turnaround in the dollar could easily see it trading back to 1.5700, like wise an extension of USD weakness on a Greek deal this week could see the pair test 1.6000 in the near term.

Technical  Commentary 

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

  • Focus shifts to 1.1465 high a break here targets an initial symmetry target of 1.1610 ahead of the daily equality corrective objective at 1.18. Caution on potential triple top with pin bar yesterday but only below 1.1150 concerns near term bullish bias, a breach of pivotal 1.1050 is needed to reverse bullish structure.
  • Daily Order Flow bullish; OBV sideways, Linear Regression and Psychology bullish but lacking 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

  • Attention shifts to symmetry target of 1.6010 ahead of equality corrective target at 1.64, Initial support comes in at 1.58 trendline support, only below 1.5550 concerns bullish bias
  • Daily Order Flow bullish; OBV sideways , Linear Regression and Psychology bullish
  • Monitoring intraday price action and Order Flow indicators on a test of 1.58 or 1.6010

gu2015-06-22 07_22_26-

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

  • 122 pivotal support while 122.50 contains downside expect test of 125, failure at 122.50 opens pivotal 122 and the 121 corrective equality target below.
  • Daily Order Flow bearish ; OBV sideways, Linear Regression and Psychology rotate around midpoints
  • Monitoring intraday price action and Order Flow indicators on a test of 128  or 122/21

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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 sideways to down, Linear Regression and Psychology pierce midpoints from above but lack momentum
  • Monitoring intraday price action and Order Flow indicators at 141.75 or 137/36

ey2015-06-22 07_31_15-