DAILY REVIEW 14 January 2015

EU Analysis:

EU: Daily- The candle is a normal spread (106pips) bear closing near the low on vol>15says. The candle close an volume suggests more downside. 

Levels of interest: Demand: Daily/Weekly:  1.1639 Supply: short-term: 1.2150, 1.2205, 1.2260, 1.2300, 1.2356, 1.2375, 1.2425, 1.2500, 1.2530, 1.2600 

Background: The fundamentals of the Euro remains weak and the fact that Goldman Sachs recently called parity by year-end only adds to the already bearish sentiment. Needless to say, the anticipated ECB sovereign QE later this month also adds to the pressure.

Prices pushed to 1.1810 in before tanking away. Based on the order book, possible short stop orders are at 1.1720 and 1.1700 whereas there is no supply until 1.1900 SM has cleared out all positions to the 1.1726 level taking out the yesterday's low of 1.1752 effortlessly. SM is likely to create selling pressure to retest the low or lower before resuming the "corrective" move back long to take out weak shorts all the way to 1.1810 or higher before resuming the downtrend. However, any break and close below the current low will negate the analysis.

EU long levels: 1.1725, 1.1700, 1.1639

EU short levels: 1.1810, 1.1900, 1.2025, 1.2150, 1.2205, 1.2260, 1.2300


GU Analysis:

GU: Day- The candle is a large spread (114pips) bear hammer closing on very high vol>16days. The candle close and volume suggests more upside.

Demand: Weekly/Daily:  1.4870 - 1.4812, 1.4229 Supply: Short term: 1.5400, 1.5470, 1.5500, 1.5540, 1.5600 

Background: Poor economic performance in the UK and political uncertainty keeps the GBP sentiment weak.  

Prices pushed 1.5222 before retracing on news. There is no demand level to trade from until the 1.4850 level to the 1.4812 pivot. There are no significant order stacks till 1.4990 - 1.5000 The order book shows a significant volume of traders trapped short with possible stops and fresh supply at 1.5250 and 1.5300 SM is likely to maintain buying pressure to retest the 1.5123 or higher before resuming the downward. The longer bias is DOWN and any long position with the SM cycle is corrective and temporary.

GU long levels: 1.5123, 1.5100, 1.5080, 1.5030, 1.5000, 1.4938, 1.4870, 1.4812 

GU short levels: 1.5230, 1.5400, 1.5470, 1.5500, 1.5540, 1.5600

Posted at 5.55 am EST