Morning Report: Mind The (Greece) Gap

Market Commentary  

USD stagnant, despite better US income and spending data; trades sideways in slow NY session; USD ends Thursday slightly lower; odds for one rate hike by year-end stays at 76%. EUR, Dax flat; Greece marginally higher. Caution is advised on holding sizeable positions into the weekend with the potential for price gaps on weekend headline risk regarding Greece.

EURUSD slipped from 1.1220 to 1.1152 low after the ECB is said to leave Greek Bank’s ELA ceiling unchanged. Greece and its creditors failed to clinch a deal, setting up a last-ditch effort on Saturday to either avert a default next week or start preparing to protect euro zone from the financial market crisis.

GBPUSD dropped to 1.5680 when UK CPI distributive trades eased to 29 in June from 51 previous, but then the pair climbed back to 1.5770 high and settled on 1.5740 level. Since the UK wants an agreement on EU treaty change as part of a bid to renegotiate its relationship, but only accepts that change may not be fully ratified by the time of the referendum.

USDJPY touched the low at 123.30 yesterday, retreating from the top 124.37 made on Wednesday. Japan’s unemployment rate stayed at 3.3% in May. Japan’s nationwide inflation read at 0.5% YoY, beat the market forecasts of 0.4%

Technical  Commentary 

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

  • 1.1150 is pivotal near term as 1.1260 stems upside reactions, expect a test of  pivotal 1.1050 a failure here would reverse the current bullish structure and really give bears the ball. Above 1.1260 expect retest of 1.1330/40, Caution on weekend gap potential with headline risk.
  • Daily Order Flow bearish; OBV down, Linear Regression and Psychology bearish
  • Monitoring intraday price and Order Flow indicators on a test of 1.16 or 1.1050/1.1150

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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 bullish but pulling back to test midpoints from above
  • Monitoring intraday price action and Order Flow indicators on a test of 1.57 or 1.6010

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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

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

  • Looking for retest of 137 as potential base for next leg higher for symmetry swing objective at 143.60’s. Failure at 137 opens a retest of 134/133
  • 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

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