DAILY REVIEW 24 November 2014


EU Analysis:

EU: Week- The candle is a normal spread (224pips) bear spinning top closing near the low on high vol<3weeks. The candle close and volume suggests more downside. Daily- The candle is a large spread (192pips) bear closing near the low on high vol>6days. The candle close and volume suggests more downside. Levels of interest: Demand: Daily/Weekly: 1.2266, 1.2240, 1.2157, 1.2182, 1.2133, 1.2105, 1.2053, 1.2037 Supply: short-term: 1.2442, 1.2470, 1.2490, 1.2515, 1.2545, 1.2565, 1.2600, 1.2632, 1.2640, 1.2685, 1.2745 (confluence with Monthly ema200 1.2735) Order Book Stops: There are no clear significant stop order levels for shorts as many of the fortunate retail crowds benefited from Draghi's speech and either closed out their positions or took profits. Stacks of sell orders, possibly a combination of weak longs and late comers trying to enter the trade can be see at 1.2400 - 1.2500, 1.2600, 1.2700 Background: The Euro remains weak based on fundamentals. Last Friday, I wrote "SM is likely to test the 1.2600 level and higher before resuming the downtrend" but ECB Draghi's extremely dovish speech on Friday sent the Euro into a tailspin against just about every other currency and may just be the catalyst for resumption of the downtrend. Prices opened gapped down by about 26pips as SM removed weak longs before reversing back upward to fade weak shorts. After a huge move and after profit taking, with no significant orders located within easy striking distance above, SM will likely fade the weak shorts to around the breakout levels and then reverse downwards to resume the downtrend.

EU long levels: 1.2500, 1.2477, 1.2465, 1.2457, 1.2442 

EU short levels: 1.2550, 1.2570, 1.2590, 1.2640, 1.2685, 1.2745


GU Analysis:

GU: Weekly-  The candle is a small spread (146pips) bear spinning top closing on high vol>1week. The candle close and volume suggests more downside. Day- The candle is a normal spread (87pips) bear large body spinning top closing on igh vol>10days. The candle close and volume suggests more downside but with buying. Demand: Weekly/Daily:  1.5426, 1.5100 Supply: Short term: Short term- 1.5816, 1.5850 Background: The fundamentals remain the same, there is no significant demand level until 1.5500 - 1.4426 pivot. The interest for a reversal in this pair would only come at these demand levels. ECB's Draghi's speech last Friday basically also caused USD to strengthen and GU was not spared. Prices opened gapped down by about 16pips and then reversed upwards. In fact last week I wrote "... maintain the selling pressure to around the 1.5655 - 1.5648 level before reversing to retest the yesterday's high..." but it actually went as low as 1.5624. With the bulk of traders trapped long, and stacks of orders nearby at the 1.5550 level, SM is likely to test those levels before reversing upwards.

GU long levels: 1.5630-15, 1.5591, 1.5561 

GU short levels: 1.5734, 1.5816, 1.5825, 1.5840, 1.5880, 1.5905

Posted at 3.49 am EST