DAILY REVIEW 8 December 2014

EU Analysis:

EU: Weekly- The candle is a below average spread (170pips) bear closing at the low on high vok>3weeks. The canlde close and volume suggests more downside. Daily- The candle is a very large spread (175pips) bear closing just off the low on high vol<1day. The candle close and volume suggests more downside. 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: The differences between the ECB and Germany plus the upcoming potential downgrades all point to a further weakening of the Euro. The NFP data on Friday was significant and resulted in USD strength across the board. Despite this, EU only managed to go 7pips lower than Thursday and closed back above at 1.2283 What was true last Friday before the NFP is still true today, that is that SM has cleared the range from the current low up to 1.2455 and there are no clear supply levels. The Fx order book confirms no clear supply levels until the 1.2390 - 1.2400 level. However it does reveal demand between 1.2240 - 1.2260. SM is likely to fade weak shorts to the breakout level 1.2357 or higher before reversing to continue the downward movement.

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

EU short levels: 1.2357, 1.2400, 1.2455, 1.2500, 1.2530


GU Analysis:

GU: Weekly- The candle is a below average spread (211pips) bear closing at the low on high vol>6weeks. The candle close and volume suggests more downside. Day- The candle is a normal spread (83pips) bear closing at the low on very high vol<1day. The candle close and volume suggests more downside. Demand: Weekly/Daily:  1.5426, 1.5100 Supply: Short term: 1.5761, 1.5825, 1.5840, 1.5880, 1.5905 Background: The fundamentals remain unchanged and the USD strength exerted during last Friday's NFP data has resulted in lower lows. There is no significant demand level until 1.5500 - 1.4426 pivot. The current order book shows a significant bunch of volume trapped long with stops at 1.5550, 1.5540, 1.5520, 1.5500, 1.5480, 1.5460, 1.5400 and demand appears to be at 1.5550, 1.5500. There is no significant supply but possibly stops around the 1.5630 level. Price has made a lower low in Asia to 1.5554 SM is likely to maintain selling pressure to the 1.5550 level or lower before reversing to fade weak shorts to around the breakout level at 1.5625 before resuming the downtrend. 

GU long levels: 1.5550, 1.5500, 1.5426, 1.5400 

GU short levels: 1.5630, 1.5680, 1.5700

Posted at 01.30 am EST