DAILY REVIEW 13 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 large spread (144pips) bull closing 1/2 off the high on low vol>1day. 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. 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: 1.1215-1.1200, 1.1131-1.1120,1.1105-1.1085, 1.1121-1.1102, 1.1005-1.0095, 1.0955-1.0945
Potential fresh supply: 1.1295-1.1307, 1.1395-1.1405 (actually the volume is pretty insignificant)
Trapped long (stop) orders: 1.1207-1.1195, 1.1131-1.1120,1.1105-1.1090, 1.1060-1.1045 other levels insignificant vol
Trapped short (stop) orders: 1.1275-1.1295, 1.1300-1.1310, no significant volumes above.

The hanging guillotine over the EU rise is the possible launch of the FED rate hike and rumours keep spinning. SM is likely to retest 1.1220 level or lower before resuming the upward move.    

EU long levels: 1.1220, 1.1200, 1.1190-1.1180, 1.1160-1.1150

EU short levels: 1.1285, 1.1325, 1.1350, 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 a very large spread (153pips) bull closing 1/3 off the high on low 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 more trapped long volumes but the volumes are generally thin and hints of a correction in the upward move coming. 

Potential demand stacks: 1.5655-1.5635, 1.5608-1.5588, 1.5560-1.5525, 1.5502-1.5480, 1.5410-1.5386, 1.5300-1.5295, 1.5210-1.5190,  (not really significant volume)

Potential supply stacks: 1.5615-1.5665, 1.5695-1.5700, 1.5800

Potential long (trapped) stops: 1.5637-1.5625, 1.5605-1.5588, 1.5555-1.5525, 1.5500-1.5490, 1.5411-1.5385, these are not really significant volumes
Potential short (trapped) stops: 1.5702-1.5728, 1.5741-1.5753, 1.5790-1.5800  no significant higher volumes

SM is likely to induce more breakout longs at yesterday's high 1.5707 or higher before reversing for reload of possibly long inventory.

GU long levels: 1.5670, 1.5658, 1.5632-1.5615, 1.5550, 1.5500, 1.5400-1.5388, 1.5371-1.5362, 1.5305-1.5290,  1.5275-1.5265 

GU short levels: 1.5707-1.5710, 1.5725, 1.5745-1.5750, 1.5761-1.5775, 1.5783-1.5800 

Posted at 01.21 am EST