DAILY REVIEW 8 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 very large spread (154pips) bear spinning top closing on high vol<1day.  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. 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.

The Oanda order book shows both net trapped short and long volumes.  
Potential Fresh demand: 1.1000-1.0090
Potential fresh supply: 1.1290-1.1307, 1.1395-1.1405 (actually the volume is pretty insignificant)
Trapped long (stop) orders: 1.1188-1.1130, 1.1065-1.1039 other levels insignificant vol
Trapped short (stop) orders: 1.1385-1.1415, no significant volumes above.

Prices spiked up to 1.1390 with SM taking profit before reversing downwards ahead of the UK elections. SM is likely to test the 1.1173 level or lower before resuming the upward move.    

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

EU short levels: 1.1375-1.1390, 1.1400-1.1410, 1.1442-1.1450, 1.1475-1.1480


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). 

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 (111pips) bear "doji" closing on high vol<1day. The candle close and volume suggests absorption of selling and 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: 1.5310-1.5295, 1.5210-1.5190, 1.5165-1.5145, 1.5113-1.5095, 1.5078-1.5050, 1.5055-1.5042, 1.5015-1.4995, 1.4965-1.4950, (not really significant volume)

Potential supply stacks: 1.5543-1.5555, 1.5590-1.5600

Potential short (trapped) stops: , 1.5285-1.5325, 1.5340-1.5375, 1.5493-1.5507,  no significant higher volumes
Potential long stops: 1.5281-1.5260, 1.5163-1.5137, 1.5103-1.5090, 1.5075-1.5043, 1.5010-1.4990, these are not really significant volumes

It looks like the Conservatives will be returned to govern and prices spiked back, with EURGBP tanking steeply as the British Pound registered the biggest jump in six years against the Euro. Prices spiked about 177pips in the first minute and kept going to 1.5521 before the fading of weak longs commenced. SM is likely to fade weak longs to the 1.5400 key level or lower before reversing to continue the corrective move up.

GU long levels: 1.5400-1.5388, 1.5371-1.5362, 1.5305-1.5290,  1.5275-1.5265 

GU short levels:  1.5521, 1.5575-1.5600, 1.5638-1.5650, 1.5675, 1.5702, 1.5725, 1.5745-1.5750, 1.5765, 1.5776-1.5785 

Posted at 03.18 am EST