DAILY REVIEW 24 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. 

Week- The candle is a below average spread (171pips) bear closing about 1/2 above the low on low vol<6weeks. The candle close and volume suggests more downside.

Daily- The candle is a normal spread (101pips) bear closing about 2/3 off the low on low vol<4days. The candle close and volume suggests no selling pressure.    
Levels of interest: Demand: Daily/Weekly:  1.1000, 1.0762  

Background: Fundamentals for the Euro remain weak and even though a deal on the Greek debt has been agreed over the weekend, the "Greek letter", which was due on Monday to the "institutions" outlining their economic pledges - was delayed until Tuesday resulting in continuing downward pressure on the Euro.

The Oanda order book reveals a somewhat similar volume trapped both long and short without significant stops for trapped longs but a clear cluster of trapped short orders at around the 1.1370 level.
Potential Fresh demand: 1.1315-1.1295, 1.1280-1.1260, 1.1220-1.1195 , 1.1192-1.1215
Potential fresh supply at 1.1405-1.1392, 1.1452-1.1440, 1.1495-1.1500
Trapped long (stop) orders: 1.1270-1.1245, 1.1200 (no significant volumes seen) 
Trapped short (stop) orders: 1.1362-1.1377, 1.1465-1.1443, 1.1493-1.1500, 1.1540-1.1550, 1.1590-1.1600

Apart from the Greek letter, the market is also awaiting FED Chair Janet Yellen's testimony. The downward pressure on the Euro continues and SM is expected to maintain selling pressure to around the 1.1300 level or lower to fade the weak longs before reversing to resume the corrective upward movement. Note that at 1400GMT, ECB's Draghi speaks at the launch of the new €20 note. At 1500GMT US Fed's Yellen starts part one of her semi annual testimony to the Senate Banking Committee on monetary policy and the economic outlook. Expect SM to do their usual wrong footing of the herd either before or during the speeches.

EU long levels: 1.1377, 1.1360, 1.1260, 1.1220, 1.1200, 1.1184, 1.0965, 1.0920, 1.0762

EU short levels: 1.1450, 1.1500, 1.1533, 1.1560, 1.1600, 1.1630, 1.1678


GU Analysis:

GU: Perspective: GU is headed to test the 1.4812 pivot which is a potential corrective move level. 

Week- The candle is a below average spread (169pips) bear small-body spinning top closing on low vol<6weeks. The candle close and volume suggests no selling pressure. 

Day- The candle is a a vry large spread (142pips) bull closing just off the high on low vol<122days. The candle close and volume suggests no buying pressure but more upside can be expected. 

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

A larger volume of traders remain trapped long but there are also sufficient traders trapped short with price nearer the shorts' stops. 

Potential demand stacks: 1.5295-1.5310, 1.5200-1.5210, 1.4990-80, 1.4950-40 
Potential supply stacks: 1.5470-1.5490, 1.5500, 1.5535-1.5550, 1.5650
Potential short (trapped) stops: 1.5470-1.5480, 1.5490-1.5505, 1.5540-1.5554, 1.5600 
Potential long stops: 1.5310-1.5290, 1.5280-1.5265, 1.5211-1.5200, 1.5195-1.5178
SM is likely to continue buying pressure to fade weak shorts to the 1.5480 or higher before reversing. With George Carney dues to speak at 1000GMT, we can expect SM to position prices before the turns.

GU long levels: 1.5320, 1.5300, 1.5250, 1.5200, 1.5168, 1.5155, 1.5100, 1.5180, 1.4988, 1.4950, 1.4938, 1.4930, 1.4870, 1.4812 

GU short levels:  1.5478, 1.5570, 1.5600, 1.5618, 1.5675

Posted at 2.03 am EST