DAILY REVIEW 12 October 2015

Dear friends,

If you follow this blog, I will not be posting daily owing to personal reasons. So far I am +6% this month. I will post every Monday and as often as time permits. To ensure that you are updated each time that I post, I would encourage you to follow me on twitter @vseowth or my facebook page VSAnalytiks.  

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 from a market structure perspective.    

MONTH- The candle is a small spread (372pips) bear closing 1/4 off the low on low vol<1month. The candle close and volume suggests no selling pressure. 

WEEK- The candle is a below average spread (215pips) bull closing near the high on low vol<2weeks. The candle close and volume suggests more upside. 

DAY- The candle is a normal spread (120pips) bull closing off the high on low vol>4days. The candle close and volume suggests more upside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Last Friday's NFP data coupled with the recent dovish FOMC meeting makes for a less than appealing Dollar long bias despite talks of an impending rate hike this year continuing to weigh heavily. It is likely that prices will retest the previous monthly pivot breakout level of 1.1640 or higher as short stops to 1.1711 have largely been cleared out and it will take firm fundamental policy change such as an interest rate decision such as a USD rate hike to push EURUSD all the way back down again, that is not likely till the next FOMC meeting 27-28 Oct, a great opportunity for SM to build short positions prior to the expected tightening. 

The Oanda order book shows more trapped short position volumes. 
Potential Fresh demand: 1.1344-1.1335, 1.1250-1.1240, 1.1233-1.1215, 1.1198-1.1190 
Potential fresh supply: no significant volumes 
Long (stop) orders: 1.1363-1.1352 
Short (stop) orders: 1.1376-1.1391, 1.1530-1.1538 (low volumes)

With no significant related data release until Wed, the weak shorts now in the cage are ready to be milked. SM is likely to test the 1.1386 level or higher before reversing. 

EU long levels: 1.1344-1.1334, 1.1300-1.1295, 1.1277, 1.1230

EU short levels: 1.1386, 1.1448-1.1459, 1.1530-1.1546, 1.1570, 1.1620-1.1627 


GU Analysis:

GU: Perspective: GU has closed below June's low 1.5169 and looks headed toward  the current monthly pivot 1.4564 as the next possible level of support/demand. The June close of 1.5701 becomes important as a supply level to overcome for higher prices.  

MONTH-  The candle is a below average spread (551pips) bear closing near the low on low vol<12months. The candle close and volume suggests no selling pressure. The candle close suggests more downside.

WEEK- The candle is a below average spread (246pips) bull closing 1/3 off the high on low vol>5weeks. The candle close and volume suggests more upside.
DAY- The candle is a below average spread (83pips) bear closing near the low 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 very thin volume without a clear position bias. 

Potential demand stacks: no significant stacks
Potential supply stacks: 1.5475-1.5485, 1.5493-1.5501

Potential long (trapped) stops:  1.5335-1.5300, 1.5293-1.5266, 1.5255-1.5247, 1.5163-1.5154

Potential short (trapped) stops: 1.5377-1.5400, 1.5464-1.5472, 1.550-1.5365, 1.5440-1.1560

With the very thin volume and relevant data only due tomorrow, SM will likely oscillate up and down to take the stops nearby above. SM is likely to maintain buying pressure to 1.5382 or higher before reversing. 

GU long levels:  1.5300, 1.5278-1.5259

GU short levels: 1.5382, 1.5472-1.5485, 1.5520

Posted at 3.54 pm EST