DAILY REVIEW 27 August 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 but the absorption of selling is likely a precursor to a retest of the 1.1640 and the 23.6% Fib (1.1794) just above it.  

MONTH- The candle is a below-average spread (407pips) bear closing 1/2 off the low on very high vol<1month. The candle close and volume suggests buying. 

WEEK- The candle is an above average spread (370pips) bull closing at the high on low vol>4weeks. The candle close and volume suggests more upside. 

DAY- The candle is an ultra-large spread (269pips) bear closing near the low on very high vol<2days. The candlc sloe and volume suggests more downside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Monday saw the market manifesting fear over worries about China, oil, global growth and the Fed resulting in panic and huge sell-offs. These fears also resulted in the unwinding of long US Dollar positions resulting in gains for the Euro and Gbp but commodity currencies got hammered in line with the sentiment. EU has broken out of a weekly "creek" structure but a retest is likely and in order with the forthcoming anticipated rate rise.  

The Oanda order book reveals very thin volumes in the aftermath and no clear bias in trapped positions. 
Potential Fresh demand: 1.1305-1.1290, 1.1211-1.1200, 1.1186-1.1158, 1.1106-1.1091 
Potential fresh supply: 1.1365-1.1450, 1.1550, 1.1600 (low volumes)
Long (stop) orders: 1.1319-1.1290, 1.1259-1.1240 (low volumes)
Short (stop) orders: 1.1415-1.1425, 1.1443-1.1453, 1.1543-1.1553, 1.1713-1.1746 (low volumes)

Prices broke out of Monday's low on the US data release and headed as expected to test the "creek" level. SM is likely to test yesterday's low 1.1290 or lower before reversing to continue the upward move.

EU long levels:  1.1290-1.1278, 1.1210-1.1200, 1.1113, 1.1100

EU short levels: 1.1425-1.1450, 1.1598-1.1605, 1.1670, 1.1700-1.1715


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. However, structures below and the close above 1.5550 indicate a return to the 1.6000 level and higher is quite possible. 

MONTH-  The candle is a below average spread (402pips) bear hammer closing on very high vol, the highest seen. The candle close and volume suggests more upside.

WEEK- The candle is a below average spread (160pips) bull "hammer" closing on vol>1week. The candle close and volume suggests more upside. 

DAY - The candle is an ultra-large spread (267pips) bear closing near the low on very high vol<2days. 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 the bulk of net long positions trapped in drawdown. 

Potential demand stacks: 1.5585-1.5575, 1.5557-1.5550, 1.5503-1.5489, 1.5475-1.5462, 1.5444-1.5418  
Potential supply stacks: 1.5693-1.5710, 1.5790-1.5802

Potential long (trapped) stops:  1.5484-1.5469, 1.5453-1.5436, 1.5423-1.5362

Potential short (trapped) stops: 1.5505-1.5515, 1.5586-1.5597, 1.5710-1.5718, 1.5815-1.5828, 1.5848-1.5860 

SM is likely to fade weak shorts to 1.5515 or higher before reversing down.

GU long levels: 1.5450, 1.5403-1.5395, 1.5331, 1.5300

GU short levels: 1.5515-1.5525, 1.5555, 1.5585-1.5600, 1.5802, 1.5929, 1.6015

Posted at 3.29 am EST