DAILY REVIEW 12 December 2014

EU Analysis:

EU: Daily- The candle is a large spread (124pips) bear spinning top closing 1/3 off the low on very high vol>4days. The candle close and volume suggests more upside but possibly with the commencement of selling. Levels of interest: Demand: Daily/Weekly: 1.2257, 1.2240, 1.2162, 1.2133, 1.2115, 1.2103, 1.2082, 1.2053, 1.2040 Supply: short-term: 1.2400, 1.2455, 1.2500, 1.2530, 1.2600 Background: Euro remains weak fundamentally. Price made a run for the 1.2500 key level yesterday but fell short and reversed downward from 1.2494. The order book suggests clear stops around 1.2500-10, 1.2550, 1.2600 There is no "demand" until 1.2350-70 and 1.2300 The clearing up of weak short positions continues before the actual continuation down. SM is likely to continue to fade weak longs to around 1.2360 or lower before reversing to retest yesterday's high at 1.2495 and higher prior to resuming the downward movement. 

EU long levels: 1.2360, 1.2300, 1.2257, 1.2240, 1.2162, 1.2133, 1.2115, 1.2103, 1.2082, 1.2053, 1.2040

EU short levels: 1.2510, 1.2530, 1.2550, 1.2600


GU Analysis:

GU: Day- The candle is a normal spread (104pips) bull "hanging man" closing on high vol>1day. The candle close and volume suggests selling but it is likely to be a bear trap with more upside. Demand: Weekly/Daily:  1.5426, 1.5100 Supply: Short term: 1.5761, 1.5825, 1.5840, 1.5880, 1.5905 Background: There was no significant UK data/news and the fundamentals remain unchanged with a technical short bias for trend. There is no significant demand level until 1.5500 - 1.4426 pivot. Yesterday price pushed to Asia high at 1.5756 before reversing downward to 1.5651 and pushing back up above 1.5700. The current order book shows a significant bunch of volume trapped shorts with stops at 1.5760-80 and possible supply at 1.5800, 1.5860 Short term demand appears to be at 1.5680, 1.5650, 1.5550, 1.5500.  SM is likely to induce shorts at 1.5690 before reversing to retest yesterday's high or higher before reversing. With weekend flows in place on a Friday, we can expect some price oscillation in a thin market.

GU long levels: 1.5680,  1.5650,1.5600, 1.5550, 1.5500, 1.5426, 1.5400 

GU short levels: 1.5762, 1.5785, 1.5800, 1.5825, 1.5860

Posted at 02.25 am EST