DAILY REVIEW 30 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 a normal spread (106pips) bull closing 1/3 off the high on low vol<5days. The candle close and volume suggests more downside.   
Levels of interest: Demand: Daily/Weekly:  1.1000, 1.0762  

Background: Fundamentals for the Euro remain weak. The FOMC statement reveals a new hawkish stance where "considerable time" for an interest rate hike was dropped and the changes "Strong/Solid Jobs Gains", "Solid Pace/Moderate Pace" for the US economy resulting in a strengthening of the US Dollar. 

Prices pushed to the 1.1261 before reversing up past Wednesday's breakout level to induce shorts and taking out stops at the day high of 1.1367 before reversing back down to 1.1278. Prices have retraced higher as weak shorts have been removed from the market. Based on the Oanda order book, fresh demand is at 1.1275, 1.1210-00, 1.1100, 1.1050 The most significant long (stop) orders are between 1.1250-1.1200 This shows that there are hardly any traders long. Potential fresh supply at 1.1500 Sentiment remains clearly bearish with fresh lot of traders entering new shorts. The daily candle is technically a "no demand" candle. SM is likely to create selling pressure to around the 1.1250 level, a break below will see the 1.1200 level tested. These are still possible reversal correction levels to position flows for Monday as there are significant volume of traders trapped short and SM may want to take out their stops if they don't have enough orders. The Euro CPI data at 5am EST and US GDP data at 8.30am EST are likely to be the catalyst for the moves.

EU long levels: 1.1250, 1.1220, 1.1200, 1.0965, 1.0920, 1.0762

EU short levels: 1.1450, 1.1500, 1.1560, 1.1600, 1.1630, 1.1678


GU Analysis:

GU: Perspective: GU has dropped further on USD strength. It is headed to test the 1.4812 pivot which is 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 very large spread (144pips) bear closing about 1/3 off the low on low vol<12days. The candle close and volume suggests more downside. 

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

Prices tanked yesterday on a combination of US Dollar strength and EURGBP correction. There is almost an equal volume trapped short and long. Potential short stops at around 1.5230, 1.5300. Potential long (trapped) stops at 1.4950-00 There is no significant potential fresh supply, possible short term manipulation level for a short entry is at 1.5085 or around the NY session breakout low. SM is likely to continue fading weak longs to around 1.5085 or higher before reversing to resume the downtrend.

GU long levels: 1.5000, 1.4950, 1.4938, 1.4930, 1.4870, 1.4812 

GU short levels: 1.5085, 1.5112, 1.5162, 1.5185, 1.5222, 1.5268, 1.5298, 1.5326, 1.5350, 1.5347, 1.5415, 1.5478

Posted at 0.45 am EST