DAILY REVIEW 25 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 below average spread (69pips) bull closing near the high on low vol>1day. The candle close and volume suggests more upside.    
Levels of interest: Demand: Daily/Weekly:  1.1000, 1.0762  

Background: Fundamentals for the Euro remain weak and even though European finance ministers agreed to Greece's proposals, the fine print and final form is yet to be concluded. FED Chair Yellen's testimony centred on the perceived risks to China's economy which is seemingly holding up just about everything else and a reluctance to see the US jobs market as having turned the quarter despite a stellar January performance. Overall, it was a dovish conservative outlook that led to weakening of the US Dollar. Therefore any movement in this pair now is more likely the effect of Dollar-weakness rather than Euro strength as the Euro continues to be mired in seemingly endless challenges.

The Oanda order book shows significant volume trapped short without significant stops for trapped short orders until a bunch from around the 1.1440-1.1500 level.
Potential Fresh demand: 1.1325-1.1315, 1.1310-1.1295, 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: 1.1465-1.1443, 1.1493-1.1500, 1.1540-1.1550, 1.1590-1.1600

On the back of the dovish comments by the FED Chair, US Dollar weakened across the board and the weakness continues. SM is likely to maintain buying pressure to the 1.1400 key level or higher to restock short positions before resuming the downtrend.

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 below average spread (72pips) bear "near doji" closing on low vol>1day. The candle close and volume suggests no selling pressure and 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 

The order book shows a similar volume of traders trapped long and 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: 1.5500, 1.5535-1.5550, 1.5650, 1.5700
Potential short (trapped) stops: 1.5490-1.5530, 1.5555-1.5560, 1.5600, 1.5615-1.5620, 1.5690-1.5700 
Potential long stops: 1.5310-1.5290, 1.5280-1.5265, 1.5211-1.5200, 1.5195-1.5178
At10.00GMT BOE's Carney, Haldane, Shafik, Cunliffe and Bailey will speak on a panel discussion at the Onebank research conference. It may or may not have an impact. SM is likely to continue buying pressure to fade weak shorts to the 1.5500 or higher before reversing to resume the downtrend. 

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:  1.5550, 1.5573, 1.5590, 1.5600, 1.5618, 1.5675

Posted at 2.12 am EST