DAILY REVIEW 9 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. Possible retracement short levels will be around the new breakout levels. 

Monthly- 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) bull "near hammer" closing off the high on low vol<3weeks. The candle close and volume suggests more upside but with reduced buying pressure.  Technically the trend is still down.

Daily- The candle is a large spread (124pips) bear inverted hammer closing at the low on average vol>7days. The candle close and volume suggests more downside and perhaps some profit taking.

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. However, ECB Bond purchases remain strong and at high pace, "Inflows into Europe-focused equity exchange-traded funds reached a record $7.8 billion in March, posting inflows on every trading day of the month, according to data by TrimTabs Investment Research on Tuesday." That was up from the previous record of $4.4B."- quoted from ForexLive. The implication of course is that this creates demand for the Euro. The FOMC Minutes released yesterday shows mixed opinions to the timing of rate rise with June being unlikely and September more likely, strengthening the US Dollar and pushing back below 1.0800 to a low of 1.0748 today.

The Oanda order book still shows significantly more trapped short volumes. 
Potential Fresh demand: 1.0750-1.0720,  1.0710-1.0690, 1.0650-1.0640, 1.0605-1.0585, 1.0500-1.0490, 1.0465-1.0430, 1.0400, 1.0000
Potential fresh supply: 1.0898-1.0907, 1.0947-1.0957, 1.0998-1.1010, 1.1034-1.1060, 1.1093-1.1100, 1.1190-1.1200
Trapped long (stop) orders: 1.0750-1.0715, 1.0710-1.0680, other levels insignificant vol
Trapped short (stop) orders: 1.0850-1.0865, 1.0873-1.0890, 1.0900-1.0905, 1.1040-1.1062, 1.1090-1.1106, 1.1190-1.1200

SM is likely to test the low at 1.0748 or lower before before reversing. A close below 1.0700 will see the current lows tested 

EU long levels: 1.0750, 1.0720, 1.0700, 1.0685, 1.0500-1.0496, 1.0490-1.0480, 1.0000

EU short levels: 1.0880, 1.0890-1.0905,1.0950-1.0965, 1.1015-1.1035, 1.1193-1.1200, 1.1257, 1.1270


GU Analysis:

GU: Perspective: GU has closed strongly past the monthly 1.4812 pivot and broken the 1.4700 key level, 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. Prices remain well within the 18 March FOMC range.

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) small-bodied bull closing off the high on low vol<3weeks. The candle close and volume suggests no buying pressure but more upside can be expected.

Day- The candle is a very large (167pips) bull closing slightly more than 1/2 below the high on low vol>4days. The candle close and volume suggests absorption of selling and 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 slightly more trapped short volume.  

Potential demand stacks: 1.4805-1.4790, 1.4780-1.4765, 1.4755-1.4745, 1.4700-1.4693 (not really significant volume)
Potential supply stacks: 1.5000-1.5010, 1.5100-1.5110, 1.5200-1.5210
Potential short (trapped) stops: 1.4975-1.4985, 1.4995-1.5010, 1.5020-1.5055, no significant higher volumes
Potential long stops: 1.4803-1.4780,1.4736-1.4705, 1.4635-1.4605, no significant lower volumes

Mergers & Acquisitions driven optimism after Shell made a move for BG Group sent GU all the way to 1.4971 prior to the FOMC minutes release after which it fell like a sack of potatoes. Having said that, it looks like the selling has been absorbed and prices may be colied to go back long without any resistance. SM is likely to induce shorts to test 1.4849 or lower before reversing to 1.4900 or higher. A close below 1.4800 will mean a test of the current structure low at 1.4633.  

GU long levels: 1.4850, 1.4820, 1.4750, 1.4720, 1.4700, 1.4630

GU short levels:  1.4975, 1.5000, 1.5026, 1.5100, 1.5136, 1.5150, 1.5200, 1.5225, 1.5280, 1.5305, 1.5320, 1.5400, 1.5420, 1.5457, 1.5500

Posted at 3.05 am EST