DAILY REVIEW 25 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 an abvove average spread (446pips) bear closing at the low on high vol>1week. The candle close and volume suggests more downside.

DAY- The candle is an ultra-large spread (206pips) bear closing near the low on low vol<3days. 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. 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. A very slight improvement in the US CPI data precipitated the sudden return of US dollar strength with EU running through stops taking out weak longs. Yellen's remarks that hinted of a possibility of a rate hike this year exacerbated the move. 

The Oanda order book shows significant net newly trapped short volumes.  
Potential Fresh demand: 1.0954-1.0942, 1.0900-1.0890, 1.0850-1.0839, 1.0801-1.0788, 1.0696-1.0688
Potential fresh supply: 1.1096-1.1109, 1.1195-1.2007
Trapped long (stop) orders: 1.0960-1.1015, 1.0900-1.0889, 1.0801-1.0789
Trapped short (stop) orders: 1.1014-1.1023, 1.1040-1.1050, 1.1096-1.1105, 1.1125-1.1136, 1.1211-1.1229

With both the UK and the US having holidays today, liquidity may be found wanting today. Furthermore, the lack of any significant news until the US durable goods and new home sales data tomorrow will likely give SM the ability to take profit by cycling/ranging around at current or lower levels. Price opened gapped down about 12pips and made a new low at 1.0964 SM is likely to fade weak shorts to 1.1040 or higher before retesting the current low.

EU long levels: 1.0958-1.0949, 1.0925-1.0916, 1.0900, 1.0878-1.0867, 1.0850-1.0836, 1.0800-1.0785

EU short levels: 1.1040-1.1050, 1.1128-1.1140, 1.1181-1.1200


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 a below average spread (298pips) bear closing near the low on very high vol>1week. The candle close and volume suggests more downside.

DAY - The candle is an ultra-large spread (230pips) bear large body spinning top closing on high vol>1day. 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 net newly trapped short volumes and earlier long trapped volumes (somewhat split into roughly two separate blocks). 

Potential demand stacks: no significant level of volumes 

Potential supply stacks: 1.5692-1.5704, 1.5742-1.5754, 1.5799-1.5811, 1.5840-1.5855, 1.5892-1.5905 

Potential long (trapped) stops: 1.5443-1.5431, 1.5404-1.5383, 1.5279-1.5261
Potential short (trapped) stops: 1.5688-1.5702, 1.5742-1.5752, 1.5845-1.5855, 1.5915-1.5930, 1.5947-1.5960  no significant higher volumes

Price opened gapped down by about 24pips and is in the process of fading weak shorts. The UK has a bank holiday today and liquidity will be thin. SM is likely fade weak shorts to  1.5540 or higher before reversing to test the current lows at 1.5457.

GU long levels: 1.5445-1.5435, 1.5404-1.5385,  1.5337-1.5329, 1.5318-1.5305, 1.5261-1.5250 

GU short levels: 1.5545-1.5555,  1.5580-1.5600, 1.5661-1.5670, 1.5685-1.5700, 1.5722-1.5731

Posted at 02.49 am EST