DAILY REVIEW 7 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 he 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 a below average spread (236pips) bull near "doji" closing on low vol>1week. The candle close and volume suggests absorption of selling. 

DAY- The candle is a below average spread (70 pips) bull closing 1/4 off the high on low vol<23days. The candle close and volume suggests no buying pressure. 

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: The Eurozone remains on the back-burner but still burning nonetheless. This is a data-packed week with lots of risk events and taking the spotlight this week will likely be the release of the US NFP later today. 

The Oanda order book a majority of the retail bunch trapped short. 
Potential Fresh demand: 1.0872-1.0864, 1.0854-1.0846, 1.10815-1.10800 
Potential fresh supply: 1.0924-1.0938, 1.1091-1.1102, 1.1120-1.1130
Long (stop) orders: 1.0894-1.0884, 1.0847-1.0840 (very low vol)
Short (stop) orders: 1.1000-1.1040, 1.2220-1.2234

Prices traded tightly yesterday as is usual pre-NFP. SM is likely to maintain buying pressure to retest yesterday's high 1.0941 or higher before reversing. 

EU long levels:1.0847, 1.0807-1.0790 

EU short levels: 1.1000, 1.1054-1.1064, 1.1095-1.1105, 1.1025, 1.1050, 1.1115-1.1129, 1.1200, 1.1215-1.1230


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 (199pips) bull closing 1/4 off the high on high vol> historical. This is in terms of buying activity, not contracts. The candle close and volume suggests more upside.

DAY - The candle is a very large spread (169pips) bear closing 1/4 off the low on low vol<6days. 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 more trapped long volume. 

Potential demand stacks: 1.5470-1.5462, 1.5401-1.5390, 1.5363-1.5330  
Potential supply stacks: 1.5552-1.5601, 1.5656-1.5678, 1.5728-1.5745, 1.5788-1.5798, 1.5800

Potential long (trapped) stops:  1.5495-1.5488,, 1.5458-1.5437, 1.5405-1.5385, 1.5305-1.5295

Potential short (trapped) stops: 1.5715-1.5730, 1.5805-1.5815 

The bearish tone following the UK MPC release essentially sent the market diving as prospects of a rate hike "dimmed". In essence, there is really no change to Carney's position. Prices dived as a result. SM is likely to retest yesterday's low 1.5466 or lower before reversing. 

GU long levels: 1.5460-1.5445, 1.5403-1.5395, 1.5300

GU short levels: 1.5595-1.5600, 1.5700, 1.5735-1.5745, 1.5810-1.5827

Posted at 03.56 am EST