DAILY REVIEW 2 November 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 an above average spread (598pips) bear closing off the low on low vol<12months. The candle close and volume suggests more downside. 

WEEK- The candle is a below average spread (198pips) doji closing on low vol>7weeks. The candle close and volume suggests buying. 

DAY- The candle is a normal spread (106pips) bull upthrust closing on very high vol>4days. The candle close and volume suggests selling.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: The last NFP data coupled with the recent dovish FOMC meeting makes for a less than appealing Dollar long bias. Then last week we had Mario Draghi's butcher's knife applied to the Euro. Structurally, it is still 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 clear FED policy on USD rate hike implementation to push EURUSD to the magical parity level. The FED's current position is that they are "ready to hike" interest rates in December. This is the policy decision that together with a dovish ECB will likely push EU to the parity level.

The Oanda order book shows significantly more net trapped short position volumes. 

Potential demand stacks:  1.0908-1.0895

Potential supply stacks: 1.1144-1.1156, 1.1190-1.1200

Potential long (trapped) stops:  1.0976-1.0969, 1.0961-1.0953, 1.0898-1.0873

Potential short (trapped) stops: 1.1064-1.1073, 1.1099-1.1110

Last Friday, month-end flows dominated as SM took profits (taking out stops) and are in the process of rebuilding short positions ahead of the new trading month. Prices opened gapped up 32 pips as SM takes out weak shorts. SM is likely to continue to retest Friday's high of 1.1071 or higher before reversing.   

EU long levels: 1.0985-1.0970, 1.0964-1.0950, 1.0900, 1.0877-1.0861, 1.0820-1.0807 

EU short levels: 1.1071, 1.1094, 1.1117, 1.1138 


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 (402pips) bull closing off the high on low vol>1month. The candle close and volume suggests more upside.

WEEK- The candle is a below average spread (225pips) bull closing off the high on low vol>8weeks. The candle close and volume suggests more upside.
DAY- The candle is a very large spread (162pips) bull closing off the high on very high vol>1day. The candle close and volume suggests more upside.

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 significantly more trapped short positions. 

Potential demand stacks: 1.5213-1.5192, 1.5123-1.5106
Potential supply stacks: 1.5435-1.5450

Potential long (trapped) stops:  1.5409-1.5400, 1.5306-1.5283, 1.5239-1.4230, 1.5159-1.5140, 1.5107-1.5095

Potential short (trapped) stops:  1.5460-1.5470, 1.5497-1.5523, 1.5542-1.5564, 1.5580-1.5590

Month-end flow prevailed last Friday as well. Prices opened gapped up about 20pips and has since closed. SM is likely to retest last Friday's high 1.5466 or higher before reversing. 

GU long levels:  1.5408-1.5400, 1.5306-1.5300, 1.5247-1.5231, 1.5200-1.5195

GU short levels: 1.5466, 1.5497-1.5510, 1.5580, 1.5600-1.5608, 1.5771, 1.5817

Posted at 1.48 am EST