DAILY REVIEW 22 January 2015

EU Analysis:

EU: Daily- The candle is a large spread (138pips) bull closing 1/2 off the low on low vol>2days. The candle close and volume suggests more upside.   
Levels of interest: Demand: Daily/Weekly:  1.1376, 1.0762  

Background: The Euro remains weak. The coming Greek election this weekend may prove significant. Any long position is counter-trend and "corrective" as the technical trend is still down.

With the looming ECB interest rate decision and press conference where the spectre of QE is likely to be discussed, Smart money made use of the rumour mill yesterday to wash and rinse to the low and then back to the high of >130pips of range essentially making anyone who takes any trades in this range extremely vulnerable to the forthcoming news release today. The next significant possible demand level is weekly level at 1.1376 and after that, 1.0762 Based on the Oanda order book, there is a lot of volume trapped shorts from 1.1600 with possible stops starting at 1.1670 to the 1.1700 key level, next set of stops at 1.1750 and further up at 1.1800. Possible fresh "demand" is at 1.1510-1.1520 and 1.1490-1.5000 SM is likely to continue creating buying pressure to around yesterday's high 1.1678 or higher before reversing to resume the downtrend. The long term trend bias remains short.

EU long levels: 1.1510, 1.1490, 1.1458, 1.0762

EU short levels: 1.1670, 1.1722, 1.1790, 1.1850


GU Analysis:

GU: Day- The candle is a normal spread (103pips) bear "near doji" closing on low vol>1day. 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: The potential UK leadership continuity issues with forthcoming elections and the poor economic performance continue to weigh heavily on the GBP. The ECB interest rate decision and discussions on QE will also weigh on the GBP.

Essentially, SM performed their wash and rinse operation as well clearing stops before reversing back upwards. From the Oanda order book, there is significant volume trapped short and possible short stops located around 1.5180,1.5200, 1.5240-70, 1.5310 and possible long stops from around 1.5000 - 1.5030 There are no significant supply order stacks but there are some at 1.5400 and 1.5500 SM is likely to create buying pressure to test yesterday's high 1.5178 or higher before reversing to resume the downtrend.

GU long levels: 1.5120, 1.5100, 1.5030, 1.5000, 1.4938, 1.4870, 1.4812 

GU short levels: 1.5270, 1.5300, 1.5345, 1.5400, 1.5470, 1.5500, 1.5540, 1.5600

Posted at 5.15 am EST