DAILY REVIEW 6 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 below average spread (240pips) bull closing off the high on high vol>1week. The candle close and volume suggests more upside.

DAY- The candle is a large spread (156pips) bull "hammer" closing off the high on low vol>2days. The candle close and volume suggests some downside but more upside 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. Continued mixed US data has dimmed the prospects of a rate hike anytime soon. Greece remains pretty much on the radar as the new Greek government touts a further possible new General Election and Europe waits for a firm resolution to the impasse, all the ingredients of a powder-keg situation are in the making that could cause new fears over the Euro.

The Oanda order book shows net trapped short volumes.  
Potential Fresh demand: 1.1170-1.1153, 1.1067-1.1050, 1.1005-1.0095
Potential fresh supply: 1.1290-1.1307, 1.1395-1.1405 (actually the volume is pretty insignificant)
Trapped long (stop) orders: 1.1068-1.1039 other levels insignificant vol
Trapped short (stop) orders: 1.1290-1.1305, no significant volumes above.

Prices pushed back to 1.1222 before fading weak longs to 1.1173 and already pushed back higher during Asia with current high at 1.1240. SM is likely to fade weak breakout longs to the 1.1200 key level or lower before resuming the upward move.    

EU long levels: 1.1200-1.1185, 1.1173, 1.1040-1.1025, 1.1002-1.0990, 1.0982-1.0990 

EU short levels: 1.1288-1.1317, 1.1368-1.1390, 1.1400-1.1410, 1.1480


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. With the UK General Elections due this 15 May 2015, we can expect volatility as the market reacts to the possible twists and turns in the run up. The EY Item Club, a UK economic forecasting group that produces quarterly economic UK forecasts, says that the UK's economic recovery is  "entrenched" and will not be blown off course by uncertainty surrounding the general election (Source: ForexLive). The rubber meets the road this week on 7 May 2015.

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 (330pips) bear upthrust closing on high vol>4weeks. The candle close and volume suggests more downside.

DAY - The candle is a normal spread (129pips) bull spinning top closing on high 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 trapped short volumes and long volumes. This would suggest to take out long stop orders if SM wants to push further up.

Potential demand stacks: 1.5055-1.5042, 1.5005-1.4990, 1.4954-1.4944, (not really significant volume)

Potential supply stacks: 1.5212-1.5228, 1.5295-1.5305, 1.5340-1.5352, 1.5395-1.5406, 1.5450-1.5465, 1.5490-1.5505

Potential short (trapped) stops: 1.5215-1.5230, 1.5246-1.5270, 1.5295-1.5308, 1.5320-1.5331, 1.5493-1.5507,  no significant higher volumes
Potential long stops: 1.5165-1.5140, 1.5086-1.5026, there are no significant volumes below

Price closed above the FOMC range high of 1.5164 and is continuing long as expected. SM is likely to test 1.5180 or lower before reversing to continue the corrective move up.

GU long levels: 1.5080, 1.5165, 1.5145, 1.5055-1.5045, 1.5025-1.5010 

GU short levels:  1.5217, 1.5242-1.5260, 1.5312-1.5335, 1.5390-1.5405, 1.5495-1.5005

To answer some folks who think that I am blogging for "fun" and don't actually trade. This is a trade I took yesterday in line with my analysis after missing the earlier move.

Posted at 12.55 am EST