DAILY REVIEW 21 October 2015

Okay folks, I know I missed yesterday owing to unscheduled stuff that took the whole day but I'm back now.

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 (160pips) bear pseudo-upthrust closing on low vol<40weeks. The candle close and volume suggests no buying pressure. 

DAY- The candle is a small spread (63pips) bull closing 1/2 off the high on low vol<5days. The candle close and volume suggests more upside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: The last NFP data coupled with the recent dovish FOMC meeting still makes for a less than appealing Dollar long bias. 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 a bias in net trapped short position volumes. 

Potential demand stacks:  1.1287-1.1277, 1.1237-1.1228, 1.1203-1.1195

Potential supply stacks: 1.1376-1.1383 

Potential long (trapped) stops:  1.1322-1.1315

Potential short (trapped) stops: 1.1502-1.1510, 1.1530-1.1540

The US building data was a mixed bag yesterday giving SM the fuel to first push EU lower to remove long trapped positions and later to reverse back upwards. There is hardly any significant supply which means SM is likely to test the 1.1377 level or higher before reversing.  

EU long levels: 1.1320-1.1316, 1.1300-1.1295, 1.1277, 1.1230

EU short levels: 1.1377-1.1385, 1.1399, 1.1479-1.1505, 1.1530-1.1540, 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 normal spread (308pips) bull closing 1/4 off the high on low vol<1week. The candle close and volume suggests more upside.
DAY- The candle is a below average spread (71pips) bear "upthrust" closing on low 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 thin volume with more trapped short volume. 

Potential demand stacks: no significant stacks
Potential supply stacks: no significant stacks

Potential long (trapped) stops:  1.5434-1.5400, 1.5327-1.5282

Potential short (trapped) stops:  1.5501-1.5533, 1.5570-1.1580, 1.5600-1.5649

SM is likely to maintain selling pressure to 1.5434 or lower before reversing. 

GU long levels:  1.5434-1.5413, 1.5390-1.5380, 1.5300, 1.5278-1.5259

GU short levels: 1.5500, 1.5533, 1.5608, 1.5637

Posted at 11.15 am EST