DAILY REVIEW 24 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 above-average spread (467pips) bull closing near the high on high vol>184weeks. The candle close and volume suggests more upside.

DAY- The candle is a very large spread (179pips) bull closing near the top on high vol>3days. 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. Mixed US data has probably dimmed the prospects of a rate hike anytime soon. Weekend news: ECB's Mario Draghi said, "The exchange rate is not a policy target, it is the outcome of different business cycles in different jurisdictions and different monetary policies or monetary policy cycles. So I cannot express any hope about it." and (Draghi) rejecting speculation that Greece may be forced to abandon the euro, reiterating that Europe's single currency is irrevocable adding, "It is pointless to go short on the euro."

The Oanda order book still shows gross and net trapped short volumes. 
Potential Fresh demand: 1.0804-1.0788, 1.0781-1.0770, 1.0700-1.0690, 1.0656-1.0645, 1.0625-1.0610, 1.0600-1.0590, 1.0500-1.0490, 1.0465-1.0430, 1.0400, 1.0000
Potential fresh supply: 1.8020-1.0832, 1.0895-1.0905, 1.0980-1.1000 (actually the volumes are pretty insignificant)
Trapped long (stop) orders:1.0770-1.0750, other levels insignificant vol
Trapped short (stop) orders: 1.0845-1.0865, 1.0895-1.0910 no significant volumes above.

The USD was dumped following the weaker than expected US data released yesterday and the corrective long cycle continues with EU reaching 1.0844 before stalling. SM is likely fade weak longs to 1.0800 or lower before resuming the upward move.    

EU long levels: 1.0800-1.0790, 1.0775-1.0750,1.0740-1.0730, 1.0658-1.0650, 1.0622-1.0610, 1.0600-1.0590, 1.0578-1.0560, 1.0500-1.0496, 1.0490-1.0480, 1.0000

EU short levels: 1.0845-1.0865, 1.0895-1.0925, 1.0940-1.0955, 1.1000, 1.1034-1.1040


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. The EY Item Club, a UK economic forecasting group that produces quarterly economic UK forecasts, says that the UK's economic recovery is  "entrenched" and will not be blown off course by uncertainty surrounding next month's general election (Source: ForexLive)

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 an above-average spread (394pips) bull closing about 1/5 off the high on average vol>2weeks. The candle close and volume suggests more upside.

DAY - The candle is a normal spread (127pips) bull hammer on high vol<1day. 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: 1.5040-1.5018, 1.5010-1.4990, 1.4956-1.4937, 1.4905-1.4875, 1.4802-1.4787, 1.4705-1.4790, 1.4600-1.4688 (not really significant volume)
Potential supply stacks: 1.5067-1.5110, 1.5142-1.5160,1.5192-1.5205, 1.5300-1.5310
Potential short (trapped) stops: 1.5075-1.5110, 1.5145-1.5160,1.5195-1.5205, 1.5290-1.5310, no significant higher volumes
Potential long stops: 1.4955-1.4931, 1.4858-1.4830 actually there are no significant volumes

The UK poor data was the catalyst for the initial drop but completely reversed with the US data release. SM is likely to continue fading weak longs to 1.5020 or lower before reversing to continue the corrective upswing.  

GU long levels: 1.5020-1.5010, 1.5000-1.4990, 1.4958-1.4948, 1.4940-1.49230, 1.4915-1.4900, 1.4880-1.4855, 1.4832-1.4814, 1.4805-1.4795, 1.4780-1.4765, 1.4725-1.4715, 1.4700-1.4690, 1.4475, 1.4227

GU short levels:  1.5090-1.5110, 1.5125-1.5136, 1.5195-1.5200, 1.5300, 1.5365, 1.5395

Posted at 9.55 am EST