Morning Report: Greek Headlines & Month/Quarter End Flows

Market Commentary  

Greece of course will continue to be in the spotlight with the bulk payment due to the IMF and Greek officials already saying the payment won’t be made. It is Month End and Quarter End as well which should make it even more volatile as a lot of portfolio rebalancing flows tend to go through today.

EURUSD once again staged an aggressive retracement from the 1.0955 lows of the Asian session resulting in a high of 1.1279 into the New York afternoon leaving a number of short term players scratching their heads with a viable explanation for the swift turnaround being attributable to weight of positions or perhaps to unwinding of positions as worries about Greece makes euro less attractive as a funding currency. This morning, the pair is trading slightly heavy and generally consolidating around the familiar 1.1200 pivot. The euphoria might be short lived with downside momentum towards 1.1145 and then 1.1050 key support levels over coming sessions as Grexit uncertainty prevails. However, given the illiquid and choppy movements, important to respect that there could be further squeeze up the 1.1245 and 1.1280 initial resistance levels on thin liquidity or tape bombs hitting the wires again. Today, Greece has a 1.6 billion Euros payment to IMF but it is already a foregone conclusion that the payment will not be made. Given the uncertainties about the future path for Greece, especially heading into the referendum this weekend.

The flock to safety continues as Greek uncertainties weigh, USDJPY trades top ­heavy ahead of the initial resistance levels of 123.00/20. Interbank reports suggest Exporter­ and month­ end related flows have played a factor this morning, with the pair pushing below the initial 122.30 level before finding some buying interest as regional equities recovered. 122.00/121.80 should be firmer supports.

GBP story was all about the major cross EURGBP yesterday, printing a massive bullish outside day pattern in the daily charts. Interbank reports suggest  profit taking on EURGBP bearish views during the market open gap lower, with players looking to revisit the trade once month­ end requirements of real money names have been fulfilled, and especially once we get further clarity with Greece. We also get revisions in UK Q1 GDP later this afternoon which could lead to some volatility.

Technical  Commentary 

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

  • Pivotal 1.1050 survives on a closing basis after a dramatic turnaround from 1.0950’s a brutal short squeeze, while 1.1050 continues to support expect further contracting range trade
  • Daily Order Flow bearish; OBV down, Linear Regression and Psychology bearish but attempting midpoint test
  • Monitoring intraday price and Order Flow indicators on a test of 1.16 or 1.1050

eu2015-06-30 07_10_22-

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

  • 1.57 survives again on a closing basis, as 1.5830/50 caps upside reactions expect test of primary trendline support at 1.5550, above 1.5850 opens retest of highs and 1.60 beyond, below 1.5550 opens 1.5350 next.
  • Daily Order Flow bearish; OBV sideways to down, Linear Regression and Psychology pulling back to test midpoints from above
  • Monitoring intraday price action and Order Flow indicators on a test of 1.57 or 1.6010

gu2015-06-30 07_13_02-

USDJPY: Short Term (1-3 Days): Bullish  – 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, while 125 caps upside expect test of 122, above 125 targets 127/128 next
  • Daily Order Flow bullish ; OBV sideways to down, Linear Regression and Psychology continue to rotate around midpoints with bearish bias
  • Monitoring intraday price action and Order Flow indicators on a test of 128 or 122/21

uj2015-06-30 07_15_08-

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

  • 133/34  supports now retesting of broken trendline support from below towards above 138 reopens 141.75 initial upside objective.
  • Daily Order Flow bearish; OBV down, Linear Regression and Psychology bearish
  • Monitoring intraday price action and Order Flow indicators at 138 and 133

ey2015-06-30 07_17_31-