DAILY REVIEW 22 October 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 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 (43pips) bear "upthrust" closing on low vol>1day. The candle close and volume suggests more downside.

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: no significant stacks

Potential long (trapped) stops:  1.0980-1.1002

Potential short (trapped) stops: 1.1384-1.1393, 1.1751-1.1830

Yesterday price just about kissed the 1.1377 as expected before reversing. SM seems to be positioning prior to the ECB press conference later today. SM is likely to test Monday's low 1.1304 or lower before reversing.  

EU long levels: 1.1304-1.1295, 1.1277, 1.1230

EU short levels: 1.1385-1.1400, 1.1479-1.1505, 1.1530-1.1540, 1.1570, 1.1620-1.1627, 1.1770-1.1792, 1.1815-1.1832 


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 (64pips) bear closing near the low 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:  1.5409-1.5394, 1.5327-1.5282

Potential short (trapped) stops:  1.5437-1.5450, 1.5470-1.5492,  1.5501-1.5533, 1.5570-1.1580, 1.5600-1.5649

With UK Retail sales data due later, we can expect SM to position prices against the move before moving. SM is likely to maintain selling pressure to retest 1.5409 or lower before reversing. 

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

GU short levels: 1.5438-1.5448, 1.5500, 1.5533, 1.5608, 1.5637

Posted at 1.51 am EST