DAILY REVIEW 25 January 2015

EU Analysis:

EU: Perspective: Price has closed below the weekly/daily 1.1376 pivot and does not have any significant demand level till the 1.1000 - 1.0762 pivot potential demand level. Bias is strongly down. Possible retracement short levels will be around the previous breakout levels. Week- The candle is a very large spread (565pips) bear closing off the low on very high vol<1week. The candle close and volume suggests more downside.

Daily- The candle is an ultralarge spread (259pips) bear closing 1/3 off the low on very high vol>4days. The candle close and volume suggests more downside.   
Levels of interest: Demand: Daily/Weekly:  1.1000, 1.0762  

Background: The Greek Syriza party is said to be in talks to form a coalition government, possibly by this Wednesday. The Euro remains weak after the ECB's QE bombshell. Prices opened gapped down by 59pips and has made a new low at 1.1097.

Based on the Oanda order book, fresh demand at 1.1100, 1.1050 and 1.1000 Short (trapped) stops at 1.200-30, 1.1300 Potential fresh supply at 1.1200, 1.1300 There is significant volume trapped short. SM is likely to push to around the 1.1250 level or higher before resuming the downtrend.

EU long levels: 1.0965, 1.0920, 1.0762

EU short levels: 1.1220, 1.1250, 1.1375, 1.1400, 1.1450, 1.1500


GU Analysis:

GU: Perspective: GU has dropped on USD strength and headed to test the 1.4812 pivot. A potential corrective move level. Week- The weekly candle is an above average spread (261pips) bear closing off the low on high vol<1week. The candle close and volume suggests more downside. Day- The candle is a normal spread (84pips) bear spinning top closing on high vol>4days. The candle close and volume suggests buying activity but more downside is expected. 

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

Prices opened gapped up 19pips. After the wash and rinse, there are no significant supply order stacks in the Oanda order book. Potential long (trapped) stops are at around 1.4940-50 and 1.4880. Small fresh demand at around 1.4950, 1.4900 Potential long (trapped) stops at 1.5030-65, 1.5100-20, 1.5150. Fresh supply around 1.5050, 1.5070-1.5110, 1.5200 SM is likely to maintain selling pressure to test Friday's low 1.4950 or lower before reversing to fade weak shorts. The trend bias remains down but we are close to a monthly demand level for a potential correction or perhaps even reversal level.

GU long levels: 1.4950, 1.4938, 1.4930, 1.4870, 1.4812 

GU short levels: 1.5050, 1.5100, 1.5150, 1.5200

Posted at 1.01 am EST