DAILY REVIEW 16 April 2015

EU Analysis:

EU: Perspective: Price has tested and broken through the 1.0500 which is simply a monthly low and psychological level with the next pyschological level at 1.0000 and the 0.9900 level being the breakout retest of a reaccumulation structure. Bias is still strongly down.  

MONTH- The candle is a large spread (778pips) bear closing nearly 1/2 above the low on ultrahigh vol>1month. The candle close and volume suggests profit taking.  However more downside can be expected as price will likely test the low. 

WEEK- The candle is a below-average spread (313pips) bear closing near the low on low vol<4weeks. The candle close and volume suggests more downside.

DAY- The candle is a large spread (131pips) bull "hammer" closing on very high vol>15days. The candle close and volume suggests more upside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Fundamentals for the Euro remain weak as the US FED mulls over the rate increase implementation. ECB Bond purchases remain strong and at high pace, the implication of course is that this creates demand for the Euro. QE for the ECB is on course and will run its course. 

The Oanda order book still shows net trapped short volumes. 
Potential Fresh demand: 1.0650-1.0635, 1.0618-1.0595, 1.0555-1.0524, 1.0500-1.0490, 1.0465-1.0430, 1.0400, 1.0000
Potential fresh supply: 1.0736-1.0750, 1.0785-1.0800, 1.0834-1.0850, 1.0880-1.0895, 1.0980-1.1000
Trapped long (stop) orders: 1.0615-1.0590, 1.0535-1.0495,  other levels insignificant vol
Trapped short (stop) orders: no significant volumes above

The ECB press conference: Draghi: "QE will run its course." Q: will there be enough Bond supply? A: Yes Q: Any rate cuts in near future? A:No Implication: Continue buying of Euro to support QE . Yesterday I wrote "The ECB rate decision later will likely see a SM sweep clearing out the herd before moving upwards." Prices pushed higher in Asia and have retraced significantly as weak longs are being faded for profit taking and restocking of long positions. SM is likely to continue fading weak shorts the 1.0640 level or lower before reversing to continue the corrective upward movement. 

EU long levels: 1.0645-1.0635, 1.0600-1.0590, 1.0570-1.0550, 1.0500-1.0496, 1.0490-1.0480, 1.0000

EU short levels: 1.0746, 1.0790-1.0805, 1.0848, 1.0880-1.0903, 1.1000


GU Analysis:

GU: Perspective: GU has closed strongly past the last month's low 1.4633 and looks headed toward  the next monthly pivot 1.4225 monthly pivot which is the next possible level of support/demand. With the UK General Elections due this 15 May 2015, we can expect volatility as the market reacts to the possible twists and turns in the run up. 

MONTH - The candle is a large spread (794pips) bear closing 1/4 off the low on high vol>1month. The candle close and volume suggests profit taking prior to a retest of the lows. 
WEEK - The candle is a below average spread (205pips) bear closing near the low on low vol<4weeks. The candle close and volume suggests more downside.

DAY - The candle is a large spread (152pips) bull "hammer" closing on high vol>9days. The candle close and volume suggests more upside.

Demand: Weekly/Daily:  1.4870 - 1.4812, 1.4229 Supply: Short term: 1.5574, 1.5600, 1.5619 

The Oanda order book shows net trapped short volume.  

Potential demand stacks: 1.4701-1.4790, 1.4600-1.4688 (not really significant volume)
Potential supply stacks: 1.4892-1.4905, 1.4945-1.4965, 1.5000-1.5010, 1.5100-1.5110, 1.5200-1.5210
Potential short (trapped) stops: 1.4879-1.4905, 1.4995-1.5010, no significant higher volumes
Potential long stops: 1.4565-1.4515, 1.4510-1.4495, no significant lower volumes

Prices were already rising on the back of reduced election fears and shot up in tandem with EU following the ECB rate decision/press conference and the poor US Beige Book data creating US Dollar weakness. Prices spiked to 1.4879 in Asia and retraced strongly. SM is likely to fade weak longs by retesting Asia low 1.4811 or lower before reversing to continue the corrective upswing.  

GU long levels: 1.4810-1.4795, 1.4780-1.4765, 1.4725-1.4715, 1.4700-1.4690, 1.4475, 1.4227

GU short levels:  1.4880-1.4890, 1.4900, 1.4925-1.4945, 1.4971-1.4980, 1.5000

Posted at 3.11 am EST