DAILY REVIEW 3 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 below average spread (69pips) bull spinning top closing 1/3 off the high on low vol<8days. The candle close and volume suggest no buying interest and more downside can be expected.   
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 remain an "inside day" of yesterday and has not closed the gap from yesterday yet. Based on the Oanda order book, fresh demand is at 1.1270-80, 1.1220-00, 1.1150, 1.1100 although there is a small stack around 1.1300-20 The most significant long (stop) orders are between 1.1270-1.1200 implying that there are hardly any traders long. Potential fresh supply at 1.1400, 1.1420, 1.1500 The sentiment remains bearish. SM is likely to create selling pressure to around the 1.1274 level or lower before reversing for the correction long. It is a fact that 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: 1.1270, 1.1250, 1.1220, 1.1200, 1.0965, 1.0920, 1.0762

EU short levels: 1.1350, 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 (92pips) bear closing 1/2 off the low on low vol<21days. The candle close and volume suggests a lack of selling interest but we can expect more downside. 

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

There is an almost equal volume trapped short and long. Price has spiked past the previous pivot low of 1.49885 to 1.49877 and is strongly reversing as trapped shorts get taken out. Potential demand stacks are still at 1.4990-80, 1.4950-40 Potential short stops at around 1.5065, 1.5080-1.5100, 1.5130, 1.5181,1.5220-30, 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 1.5050 or higher. SM is likely to continue fading weak shorts to around 1.5050 or higher before reversing to retest the 1.4950 level before the corrective move upward.

GU long levels: 1.4988, 1.4950, 1.4938, 1.4930, 1.4870, 1.4812 

GU short levels: 1.5050, 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 3.15 am EST