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    IronFX Essential Intraday Comment | 06/07/2015

    • The dollar traded mixed against its major peers during the European morning Monday, in the absence of any major market moving events. It was higher against NOK, GBP and JPY, in that order, while it was lower against AUD, SEK and EUR. The greenback was unchanged against CHF, NZD and CAD.

    • European equity markets opened lower after Greece rejected the creditors’ bailout proposals in Sunday’s referendum. The increased risk of a Grexit has caused a broad-based weakness in European stocks, with DAX down more than 1%. However, Greek PM has insisted that the country’s future remains in the Eurozone and a deal will be reached. The sentiment towards a deal has improved somewhat after Greek finance minister Varoufakis resigned due to some Eurogroup participants preference for him to be absent from the meetings. This was received as positive from the markets and EUR rose a bit on the news. EUR/USD managed to recover the opening gap but declined a bit to trade slightly above our support of 1.1030. A clear break of that level is likely to target our next support at 1.0965.

    • DAX futures gapped down on Monday following Greece’s “no” vote. The index opened below the key barrier of 10800 (S2), but during the European morning it recovered more than half of the gap to trade above the 10870 (S1) line, which happens to be the 38.2% retracement level of the 16th of October – 10th of April advance. Although DAX futures may continue recovering, perhaps to test the 11000 (R1) area, I would consider the outlook to remain negative. The index is trading below the longer-term uptrend line taken from the low of the 16th of October, and within the downside channel that has been containing the price action since the last days of March. I would expect sellers to eventually take control and aim for another dip below the 10800 (S2) hurdle. Such a move is likely to set the stage for extensions towards the 10600 (S3) territory, marked by the lows of the 9th and 10th of February. Our short-term oscillators support the case that more declines could be on the cards. The RSI turned down after hitting resistance slightly below its 50 line, while the MACD, already negative, has fallen below its trigger line and points down.

    • Support: 10870 (S1), 10800 (S2), 10600 (S3)

    • Resistance: 11000 (R1) 11115 (R2), 11300 (R3)


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