DAILY REVIEW 28 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 a normal spread (109pips) bull closing 1/4 off the high on average 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. 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 overwhelming net newly trapped short volumes.  
Potential Fresh demand: 1.0800-1.0790, 1.0700-1.0690, 1.0600-1.0590
Potential fresh supply: 1.0990-1.1000, 1.1090-1.1105, 1.1187-1.1200
Trapped long (stop) orders: 1.0815-1.0786, 1.0772-1.0760
Trapped short (stop) orders: 1.0930-1.0957, 1.0972-1.0985, 1.0992-1.1020,  1.1063-1.1081, 1.1150-1.1157

The Greeks announce an "imminent" deal, the Europeans deny it.... This sums up the "She loves me, she loves me not... Greek saga that has taken centre stage." EU bobbed up and down like Joe Frazier of past. SM is likely to fade weak shorts to 1.9070 or higher before retesting the current low 1.0818.

EU long levels: 1.0820-1.0807, 1.0770-1.0750

EU short levels: 1.0970-1.0985, 1.1008-1.1020, 1.1065-1.1085, 1.1145-1.1155, 1.1185-1.1195


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 a large spread (136pips) bear 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 significant net trapped short volumes and earlier long trapped volumes. 

Potential demand stacks: 1.5300-1.5290, 1.5252-1.5235, 1.5201-1.5190, 1.5107-1.5085 

Potential supply stacks: 1.5500-1.5510, 1.5600-1.5610, 1.5692-1.5704, 1.5799-1.5811

Potential long (trapped) stops:  1.5302-1.5285, 1.5272-1.5254,1.5201-1.5170, 1.5085-1.5070
Potential short (trapped) stops: 1.5458-1.5475, 1.5499-1.5522, 1.5582-1.5608, 1.5688-1.5702  no significant higher volumes

With UK GDP data out later today, we can expect the weak shorts to be taken out before the continuation down. SM is likely fade weak shorts to  1.5465 or higher before reversing to test the current low at 1.5300.

GU long levels: 1.5300-1.5290, 1.5260-1.5250, 1.5170-1.5160

GU short levels: 1.5457-1.5470, 1.5501-1.5515, 1.5545-1.5555, 1.5695-1.5705

Posted at 01.29 am EST