DAILY REVIEW 22 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 below average spread (101pips) bull pseudo-upthrust closing on low vol<2days. The candle close and volume suggests lack of selling interest  but some downside can be expected.

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. The FOMC statement released seems to imply that a June rate hike is unlikely but still not off the table. The potential hanging guillotine over the EU rise remains the possible launch of the FED rate hike.

The Oanda order book shows significant net newly trapped long volumes and earlier trapped short volumes.  
Potential Fresh demand: 1.1060-1.1047, 1.1008-1.0993, 1.0959-1.0942
Potential fresh supply: 1.1166-1.1176, 1.1191-1.1205, 1.1396-1.1407
Trapped long (stop) orders: 1.1065-1.1047, 1.1040-1.1023, 1.1013-1.0999, 1.0978-1.0968
Trapped short (stop) orders: 1.1174-1.1204

German GDP data will be released at 2 am EST followed by ECB's Draghi's speech at 4 pm EST. There is significant trapped long volumes and SM is likely to induce shorts by retesting the pivot 1.1061 or lower before reversing.

EU long levels: 1.1065-1.1047, 1.1040-1.1023, 1.1013-1.0999, 1.09858, 1.0978-1.0968

EU short levels: 1.1155, 1.1174-1.1204, 1.1305, 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 very large spread (174pips) bull closing1/4 off the high on average vol<2days. 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 new significant trapped long volumes and earlier short trapped volumes. 

Potential demand stacks: no significant level of volumes 

Potential supply stacks: 1.5695-1.5708, 1.5720-1.5733, 1.5799-1.5811, 1.5840-1.5855, 1.5892-1.5905 

Potential long (trapped) stops: 1.5650-1.5640, 1.5630-1.5620, 1.5591-1.5582, 1.5556-1.5530, 1.5522-1.5502
Potential short (trapped) stops: 1.5695-1.5715, 1.5723-1.5735, 1.5845-1.5855, 1.5915-1.5930, 1.5947-1.5960  no significant higher volumes

Price is now retracing fading weak longs after the UK data release yesterday. BOE's George Carney is scheduled to speak later at 0700 EST, price is likely to be positioned by SM prior to or during the speech. SM is likely fade weak longs to yesterdays NY low 1.5644 or lower before reversing to resume the upward movement.

GU long levels: 1.5644-1.5640, 1.5630-1.5618, 1.5591-1.5580, 1.5571-1.5565, 1.5554-1.5540, 1.5520-1.5505, 1.5471-1.5458 

GU short levels: 1.5698-1.5718, 1.5725-1.5735, 1.5787-1.5807, 1.5851-1.5875, 1.5880-1.5890, 1.5900-1.5910, 1.5925-1.5935, 1.5957-1.5970, 1.5990, 1.6000, 1.6010-1.6026 

Posted at 11.39 pm EST