DAILY REVIEW 11 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- The candle is a near average spread (325pips) bull small-bodied spinning top closing about 1/2 off the high on high vol>2weeks. The candle close and volume suggests some downside before more upside.

DAY- The candle is a normal spread (110pips) bear closing 1/3 off the low on high vol>1day. The candle close and volume suggests more downside.

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. NFP data last Friday was weaker than expected so the FED is unlikely to raise rates anytime soon. However, Greece remains pretty much on the radar as the EU Finance Ministers meet today and repayment dealines to the IMF loom large this week.

The Oanda order book shows both net trapped short and long volumes.  
Potential Fresh demand: 1.1108-1.1090, 1.1010-1.0095
Potential fresh supply: 1.1295-1.1307, 1.1395-1.1405 (actually the volume is pretty insignificant)
Trapped long (stop) orders: 1.1108-1.1090, 1.1070-1.1045 other levels insignificant vol
Trapped short (stop) orders: 1.1295-1.1305, no significant volumes above.

NFP data on Friday was weaker than expected and resulted in a spike to 1.1287, however the USD strengthened as the results were close enough to expectations such that growth is still apparent but weak enough so that the FED won't raise rates anytime soon, US stocks soared and the US Dollar continued to strengthen.  SM is likely to test the 1.1120 level or lower before resuming the upward move.    

EU long levels: 1.1120, 1.1100-1.1090, 1.1080-1.1065, 1.1040-1.1025, 1.1002-1.0990, 1.0982-1.0990 

EU short levels: 1.1190-1.1210, 1.1375-1.1390, 1.1400-1.1410, 1.1442-1.1450, 1.1475-1.1480


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 over and David Cameron returned, we can expect some post-election volatility as he forms his new cabinet and navigates the demands of the Scottish National Party and the EU.

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 - The candle is a large spread (433pips) bull closing off the high on very high volu>14weeks. The candle close and volume suggests more upside.

DAY - The candle is an ultra-large spread (278pips) bull closing 1/4 off the high on ultra-high vol>80days. 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 both trapped short volumes and long volumes. 

Potential demand stacks: 1.5308-1.5295, 1.5210-1.5190, 1.5165-1.5145, 1.5113-1.5095, 1.5065-1.5050, (not really significant volume)

Potential supply stacks: 1.5495-1.5515, 1.5543-1.5555, 1.5590-1.5600, 1.5700, 1.5800

Potential short (trapped) stops: , 1.5285-1.5325, 1.5340-1.5375, 1.5493-1.5507,  no significant higher volumes
Potential long stops: 1.5360-1.5345, 1.5281-1.5260, 1.5112-1.5100, 1.5090-1.5060, 1.5055-1.5040, these are not really significant volumes

With the UK interest rate decision at 7am EST, we can expect SM to position prices against the intended move prior to the release. SM is likely to retest current Asia low at 1.5404 level or lower before reversing to continue the corrective move up.

GU long levels: 1.5400-1.5388, 1.5371-1.5362, 1.5305-1.5290,  1.5275-1.5265 

GU short levels:  1.5521, 1.5575-1.5600, 1.5638-1.5650, 1.5675, 1.5702, 1.5725, 1.5745-1.5750, 1.5765, 1.5776-1.5785 

Posted at 02.38 am EST