DAILY REVIEW 19 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 (150pips) bear closing near the low on low vol<9days. 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. 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: 1.1253-1.1244, 1.1205-1.1292, 1.1187-1.1177
Potential fresh supply: 1.1396-1.1407, 1.1435-1.1450, 1.1500-1.1510,  (actually the volume is pretty insignificant)
Trapped long (stop) orders: 1.1296-1.1280, 1.1205-1.1185  other levels insignificant vol
Trapped short (stop) orders: 1.1296-1.1355, 1.1370-1.1380, 1.1250-1.1465 no significant volumes above.

Today's EUR CPI data and the US Building Permits data following will be the catalyst for price movement. SM continued to take profits as price came off the highs yesterday making a new Asia low at 1.1284 today. SM is likely to fade weak shorts to Asia high 1.1325 or higher before reversing to retest Asia low.

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: 1.1325, 1.1340-1.1350, 1.1365-1.1380, 1.1392-1.1400


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. 

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 avarage spread (107pips) bear closing near the low on low vol<9days. 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: 1.5605-1.5588, 1.5554-1.5544, 1.5505-1.5482

Potential supply stacks: 1.5747-1.5760, 1.5785-1.5805, 1.5840-1.5855, 1.5892-1.5905 

Potential long (trapped) stops: 1.5637-1.5620, 1.5605-1.5685, 1.5555-1.5525, 1.5506-1.5495, 1.5490-1.5480
Potential short (trapped) stops: 1.5708-1.5756, 1.5808-1.5830, 1.5840-1.5855, 1.5915-1.5930, 1.5947-1.5960  no significant higher volumes

The market is cautious going into today's UK CPI data release. The struggle for tangible progress continues even as the signs point to some degree of improvement. As I write, price has broken yesterday's low and the current Asia low sits at 1.5630, testing the NY session low of 15 May 2015. SM is likely to fade weak shorts to Asia high 1.5662 or higher before reversing to test Asia low.

GU long levels: 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 11.20 pm EST