DAILY REVIEW 30 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 (328pips) bull hammer closing on low vol<1week. The candle close and volume suggests more upside.

DAY- The candle is an ultra-large spread (228pips) bull closing about 1/5 off the high on very high vol>28days. 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. Continued mixed US data has dimmed the prospects of a rate hike anytime soon. Greece remains pretty much on the radar as the new Greek government touts a further possible new General Election and Europe waits for a firm resolution to the impasse, all the ingredients of a powder-keg situation are in the making that could cause new fears over the Euro.

The Oanda order book still shows gross and net trapped short volumes. 
Potential Fresh demand: 1.1061-1.1040, 1.0990-1.0985, 1.0958-1.0945, 1.0925-1.0895, 1.0855-1.0815, 1.0805-1.0790, 1.0780-1.0755, 1.0620-1.0590, 1.0500-1.0490, 1.0465-1.0430, 1.0400, 1.0000
Potential fresh supply: 1.1185-1.1190, 1.1200 (actually the volumes are pretty insignificant)
Trapped long (stop) orders: 1.0859-1.0840, 1.0770-1.0760 other levels insignificant vol
Trapped short (stop) orders: 1.0985-1.1007, 1.1042-1.1060, 1.1080-1.1105, 1.1190-1.1205 no significant volumes above.

The FOMC did not set a timeline on the possible rate increase although it did say that the first quarter results were "transitional" and they expect the US economy to continue strengthening, which means that it really is status-quo and US Dollar will remain weak. SM is likely continue to fade weak longs to retest the current low (currently 1.1070) or lower before resuming the upward move. As I write, EU looks to have pushed off, in the even that it fails to test the lows again, a possible long reentry would be from the retest of the 1.1110-1.1100 level after it breaks out of Asia and retraces.   

EU long levels: 1.1070, 1.1061-1.1040, 1.0990-1.0985, 1.0958-1.0945, 1.0923-1.0914, 1.0900-1.0895, 1.0820-1.0810, 1.0800-1.0790, 1.0785,1.0750-1.0735, 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: 1.1190-1.1205, 1.1244-1.1255, 1.1299-1.1320, 1.1340, 1.1390


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 (487pips) bull closing at the high on low vol<1week. The candle close and volume suggests more upside.

DAY - The candle is a very large spread (171pips) bull closing 1/3 off the high on very high vol>28days. 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 gross trapped short volume but net short volume is still thin. The implication is that it could swing wildly as SM picks orders and needs range to build volume.  

Potential demand stacks: 1.5389-1.5370, 1.5350-1.5332, 1.5310-1.5290, 1.5275-1.5245, 1.52457-1.523, 1.5200-1.5190, 1.5175-1.5145, 1.5105-1.5090, 1.5058-1.5045 (not really significant volume)
Potential supply stacks: 1.5490-1.5505
Potential short (trapped) stops: 1.5443-1.5480, 1.5490-1.5505 no significant higher volumes
Potential long stops: 1.5388-1.5375, 1.5344-1.5334, 1.5325-1.5315, 1.5155-1.5115, 1.5100-1.5085, 1.5002-1.4990 actually there are no significant volumes until 1.5000

Prices tanked on the FOMC after making fresh highs to 1.5497 yesterday and SM is still in the midst of fading weak longs. SM is likely to fade weak longs to 1.5375 or lower before reversing to continue the upswing.  

GU long levels: 1.5375-1.5360, 1.5350-1.5340, 1.5310-1.5290, 1.5275-1.5270, 1.5240-1.5230, 1.5210, 1.5200-1.5190, 1.5155-1.5130,1.5120-1.5110, 1.5100-1.5090, 1.5040-1.5025, 1.5020-1.5010, 1.5000-1.4990, 1.4965-1.4950, 1.4915-1.4900, 1.4880-1.4855, 1.4832-1.4814, 1.4805-1.4795

GU short levels:  1.5340-1.5355, 1.5375-1.5380, 1.5390-1.5405, 1.5450-1.5460, 1.5490-1.5505, 1.5530-1.5550, 1.5572

Posted at 02.55 am EST