DAILY REVIEW 2 February 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. 

Month- The candle is a very large spread bear closing off the low on ultrahigh vol>38months. The candle close and volume suggests more downside. Week- The candle is a large spread (565pips) bull closing 1/2 off the high on high vol<2weeks. The candle close and volume suggests reduced selling interest but expected further downside.

Daily- The candle is a normal spread (87pips) bear closing off the low on low vol<7days. 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 opened gapped up approx 28pips today and has not closed the gap yet with price action remaining inside of Friday's range. Based on the Oanda order book, fresh demand is at 1.1270-80, 1.1220-00, 1.1150, 1.1100 The most significant long (stop) orders are between 1.1270-1.1200 This implies that there are hardly any traders long. Potential fresh supply at 1.1400, 1.1420, 1.1500 Sentiment remains bearish. Note the whipsaw oscillatory action last week as SM trapped the traders short suggesting a short term accumulation. 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 NFP this week as there are significant volume of traders trapped short it is likely that SM may want to take out their stops if they don't have enough orders to continue the push down yet. 

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. 
Month- The candle is a large spread bear closing just off the low on ultrahigh volume. The candle close and volume suggests more downside. Week- The candle is a normal spread (237pips) bull "inverted hammer" closing on low vol<3weeks. The candle close and volume suggests buying activity but more downside can be expected. 

Day- The candle is a normal spread (109pips) bear "pseudo upthrust" closing on low vol>1day. 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 gapped up 10pips at the open today but has since closed the gap. There remains almost an equal volume trapped short and long. Potential demand stacks at 1.4990-80, 1.4950-40 Potential short stops at around 1.5220-30, 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 day high 1.5092 or higher. SM is likely to continue selling pressure to around 1.5000 or lower before reversing to start the corrective move upward.

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

GU short levels: 1.5092, 1.5112, 1.5162, 1.5185, 1.5222, 1.5268, 1.5298, 1.5326, 1.5350, 1.5347, 1.5415, 1.5478

Posted at 4.15 am EST