DAILY REVIEW 1 May 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 an above-average spread (745pips) bull closing very near the high on ultra high vol>42months. The candle close and volume suggests more upside. However the monthly trend is still down. 

WEEK- Not closed yet.

DAY- The candle is an ultra-large spread (195pips) bull spinning top closing about 1/4 off the high on very high vol>75days. 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 a build up of trapped long volumes without stops seen in the net positions. This suggests that SM will have to create selling pressure to induce shorts and clearing out of the weak longs. 
Potential Fresh demand: 1.1176-1.1150,1.1137-1.1122, 1.1113-1.1095, 1.1068-1.1045, 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: 1.1300-1.1315 (actually the volumes are pretty insignificant)
Trapped long (stop) orders: 1.1110-1.1090, 1.1070-1.1035 other levels insignificant vol
Trapped short (stop) orders: 1.1268-1.1315 no significant volumes above.

EU broke to new highs as SM wiped up and down yesterday before fading weak longs. SM is likely continue to fade weak longs to around 1.1185 or lower before resuming the upward move.    

EU long levels: 1.1185, 1.1160-1.1150, 1.1143-1.1133, 1.1090, 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 an above average spread (932pips) bull closing 1/5 off the high on high vol>2months. The candle close and volume suggests more upside. 
WEEK - Not closed yet.

DAY - The candle is an ultra large (188pips) bear spinning top closing almost 1/3 off the low on very high vol<1day. The candle close and volume suggests more downside.

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

The Oanda order book shows equal gross trapped short and long volume but net positions show clear long stops. The implication is that SM head to take out these stops before reversing back up.  

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, 1.5550-1.5565
Potential short (trapped) stops: 1.5490-1.5505 no significant higher volumes
Potential long stops: 1.5302-1.5285, 1.5250-1.5225, 1.5210-1.5195, 1.5155-1.5130, 1.5100-1.5085, 1.5002-1.4990 actually there are no significant volumes until 1.5000

Prices retested the previous day's high but stalled at 1.5491 and tanked. SM is still in the midst of fading weak longs possibly profit taking and repositioning with the upcoming UK elections. SM is likely to continue to fade weak longs to 1.5300 or lower before reversing to continue the upswing.  

GU long levels: 1.5300-1.5290, 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:  1.5490-1.5505, 1.5550-1.5565, 1.5572

Posted at 11.05 am EST