DAILY REVIEW 18 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 slightly below average (335pips) bull closing near the high on low vol<2weeks. The candle close and volume suggests more upside.

DAY- The candle is a large spread (143pips) bull hammer closing 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. The potential hanging guillotine over the EU rise remains the possible launch of the FED rate hike.

The Oanda order book shows significant net freshly trapped long volumes and earlier trapped short volumes.  
Potential Fresh demand: 1.1415-1.1397, 1.1326-1.1315, 1.1306-1.1290
Potential fresh supply: 1.1435-1.1450, 1.1500-1.1510,  (actually the volume is pretty insignificant)
Trapped long (stop) orders: 1.1408-1.1397, 1.1326-1.1315,  other levels insignificant vol
Trapped short (stop) orders: 1.1465-1.1485, 1.1497-1.1510 no significant volumes above.

With tomorrow's forthcoming EUR CPI data, prices will be positioned by SM. SM is likely to induce selling pressure to Asia low 1.1416 or lower before resuming the upward move possibly to test the 1.1475 level or higher.

EU long levels: 1.1391-1.1378, 1.1370-1.1360, 1.1335, 1.1255, 1.1220, 1.1200, 1.1190-1.1180, 1.1160-1.1150

EU short levels: 1.1442-1.1455, 1.1475-1.1480, 1.1542-1.1560, 1.1659, 1.1691-1.7005, 1.1715-1.1730


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. Tomorrow's UK CPI data looms large.

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 an above average spread (421pips) bull closing 1/4 off the high on high vol<2weeks. The candle close and volume suggests more upside.

DAY - The candle is a below average spread (107pips) bear spinning top closing on low vol>4days. 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 both new significant trapped long volumes and earlier short trapped volumes. 

Potential demand stacks: 1.5705-1.5695, 1.5685-1.5675, 1.5655-1.5642, 1.5605-1.5595, 1.5557-1.5545, 1.5508-1.5495 (not really significant volume)

Potential supply stacks: 1.5785-1.5805, 1.5840-1.5855, 1.5892-1.5905, 

Potential long (trapped) stops: 1.5700-1.5685, 1.5635-1.5615, 1.5605-1.5582, 1.5565-1.5542 these are not really significant volumes
Potential short (trapped) stops: 1.5808-1.5830, 1.5840-1.5855, 1.5915-1.5930, 1.5947-1.5960  no significant higher volumes

SM is likely to fade weak longs to Friday's low 1.5700 or lower before reversing to continue the upward move.

GU long levels: 1.5700-1.5690, 1.5675, 1.5650, 1.5632-1.5615, 1.5605-1.5595, 1.5550, 1.5555- 1.5540, 1.5400-1.5388, 1.5371-1.5362, 1.5305-1.5290,  1.5275-1.5265 

GU short levels: 1.5810, 1.5830-1.5845, 1.5880-1.5890, 1.5900-1.5910, 1.5922-1.5935, 1.5957-1.5970, 1.5990, 1.6000, 1.6010-1.6026 

Posted at 02.20 am EST