DAILY REVIEW 17 December 2014

EU Analysis:

EU: Daily- The candle is a large spread (136pips) bull closing nearly 1/2 off the high on ultrahigh vol>32days. 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 but based on technical analysis, price has broken out of a falling wedge and is in a "corrective" upward swing. The order book shows a larger volume of traders trapped short with fresh shorts currently in profit from 1.2550. Possible stops of current longs are seen at 1.2410 - 1.2390-1.2400 with short term"demand" at 1.2470, 1.2450,1.2400, 1.2350-70 and 1.2300 The huge volume of traders trapped short suggests the clearing up of weak short positions will continue prior to the actual continuation down. SM is likely to create selling pressure to around 1.2450 or lower before reversing to test 1.2600 and higher prior to resuming the downward movement. 

EU long levels: 1.2447, 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: 1.2600, 1.2635, 1.2675, 1.2730, 1.2770


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 fundamentals are unchanged and like the Euro, Gbp is in a "corrective" upward retracement. There is no significant demand level until 1.5500 - 1.4426 pivot. Price broke and closed above the 1.5762 pivot yesterday before retracing. The current order book reveals more volume traders trapped short. Trapped longs above 1.5700 Possible fresh demand is at 1.5600 with long traders' stops at 1.5700, 1.5670-80, 1.5630-40, 1.5530-40, 1.5500 and short traders' stops at 1.5780-1.5800, 1.5810-20, 1.5840-60. Short term demand appears to be at 1.5700,1.5650, 1.5550, 1.5500.  Fresh supply looks to be at 1.5780, 1.5800, 1.5840, 1.5900 and 1.6000. 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: 1.5700, 1.5650, 1.5600, 1.5550, 1.5530, 1.5500, 1.5426, 1.5400 

GU short levels: 1.5785, 1.5800, 1.5825, 1.5860

Posted at 02.38 am EST