DAILY REVIEW 4 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 very large spread (221pips) bull closing about 1/4 off the high on average vol>6days. 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.  

SM used the weak US data to squeeze US Dollar long positions resulting in overall US Dollar weakness driving all Majors upwards resulting in a significant volume of trapped shorts. Based on the Oanda order book
Potential Fresh demand: 1.1300-1.1290, 1.1220-1.1195 
Potential fresh supply at 1.1400, 1.1420, 1.1500
Trapped long (stop) orders: 1.5080, 1.1412-1.1427  
Trapped short (stop) orders: 1.1540-1.1570, 1.1595-1.1610
The sentiment remains bearish but we are now in the SM corrective cycle long for reload of short positions. 
Yesterday I wrote, "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" and this is indeed the case. SM is likely to create buying pressure to around the 1.1500 level or higher before reversing to remove weak longs to around 1.1400 for resumption of the corrective move long. 

EU long levels: 1.1400, 1.1375, 1.1270, 1.1250, 1.1220, 1.1200, 1.0965, 1.0920, 1.0762

EU short levels: 1.1500, 1.1533, 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 very large spread (210pips) bull closing just off the high on low vol>1day. The candle close and volume suggests more upside. 

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 significant volume trapped short. SM used the UK news yesterday to induce shorts before reversing and leaving them trapped. The SM cycle is now biased long to at least clear these shorts before reversing to resume the downtrend. 
Potential demand stacks: 1.4990-80, 1.4950-40 (unchanged)
Potential supply stacks: 1.5200 (very small supply, not really significant) no supply above this.
Potential short (trapped) stops: 1.5200-30, 1.5280, 1.5300-20. 
Potential long stops/manipulation: 1.5100, 1.5080
There is no significant potential fresh supply, possible short term manipulation level for an intraday short trade is at 1.5200 - 1.5223. SM is likely to continue fading weak shorts to around 1.5223 or higher before reversing to remove weak longs to the 1.5100 - 1.5080 level before resuming the corrective move upward.

GU long levels: 1.5100, 1.5180, 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 1.23 am EST