DAILY REVIEW 16 December 2014

EU Analysis:

EU: Daily- The candle is a below average spread (64pips) bear closing off the low on very high vol>1day The candle close and volume suggests more upside. 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: 1.2500, 1.2530, 1.2600 Background: The fundamentals of the Euro remains weak. The order book suggests clear stops around 1.2500-10, 1.2550, 1.2600 Possible stops of current longs are seen at 1.2410 - 1.2390-1.2400 with short term"demand" at 1.2400, 1.2350-70 and 1.2300 The order book shows a huge volume of traders trapped short and the clearing up of weak short positions is continuing before the actual continuation down. SM is likely to create selling pressure to around 1.2410 or lower before reversing to retest 1.2495 and higher prior to resuming the downward movement. 

EU long levels: 1.2410, 1.2390, 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 very large spread (146pips) bear closing 1/4 off the low on very high vol>6days. The candle close and volume suggests more downside but also possible buying. Demand: Weekly/Daily:  1.5426, 1.5100 Supply: Short term: 1.5761, 1.5825, 1.5840, 1.5880, 1.5905 Background: The lack of significant UK data/news leave the fundamentals remain unchanged with a technical short bias for trend. There is no significant demand level until 1.5500 - 1.4426 pivot. Price pushed to Asia high at 1.5745 before diving past the 1.5600 key level yesterday. The current order book shows possibly some profit taking since yesterday as a significant bunch of volume trapped longs above the 1.5700 have "disappeared" and newly trapped shorts from 1.5650. Trapped longs above 1.5700 have also reduced significantly. Possible fresh demand is at 1.5600 with long traders' stops at 1.5530-40, 1.5500 and short traders' stops at 1.5540-50. Short term demand appears to be at 1.5650, 1.5550, 1.5500.  Fresh supply looks to be at 1.5750 and higher. SM is likely to continue the downward pressure and induce shorts at yesterday's low 1.5600 or lower before reversing. BOE Governor Carney speaking later today will likely be the catalyst for the SM move. 

GU long levels: 1.5600, 1.5550, 1.5530, 1.5500, 1.5426, 1.5400 

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

Posted at 00.44 am EST