DAILY REVIEW 5 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 an above average spread (123pips) bear closing near the low on high vol>2days. 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 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:  no significant stacks

Potential supply stacks: no significant stacks

Potential long (trapped) stops:  1.0795-1.0782, 1.0760-1.07326, 1.0693-1.0688
Potential short (trapped) stops: 1.0870-1.0883, 1.0900-1.0910, 1.0917-1.0939, 1.0982-1.0990, 1.1000-1.1013

Just a word from FED Chair Yellen that the rate hike is on course for December was all it took for the USD bulls to race out of the stalls. This is likely SM repositioning prices prior to the US NFP data release tomorrow. SM is likely to fade weak shorts to 1.0900 or higher before reversing.   

EU long levels: 1.0820-1.0807 

EU short levels: 1.0900, 1.0925, 1.0950, 1.1000 


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 below averahe spread (84pips) bear large body spinning top closing on high vol>2days. 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 positions. 

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

Potential long (trapped) stops:  1.5405-1.5390, 1.5308-1.5300, 1.5248-1.4230, 1.5170-1.5154, 1.5125-1.5113, 1.5107-1.5095

Potential short (trapped) stops: 1.5402-1.5414, 1.5437-1.5452, 1.5505-1.5515, 1.5550-1.5564, 1.5576-1.5585

UK data and interest rate decision later today will position prices to the levels for trade setups. SM is likely to fade weak shorts to the 1.5415 level or higher before reversing. 

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

GU short levels: 1.5415, 1.5450-1.5460, 1.5472, 1.5497-1.5510, 1.5580, 1.5600-1.5608, 1.5771, 1.5817

Posted at 5.32 am EST