DAILY REVIEW 1 December 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. November's candle suggests more downside but the lack of volume suggests retracement possibilities before that happens. Last week's candle confirms this. Furthermore, there are no significant order stops lower until the 1.0000 key level. Bias is still strongly down from a market structure perspective.    

MONTH- The candle is a below average spread (492pips) bear closing at the low on low vol<13 months. The candle close suggests more downside. 

WEEK- The candle is a below average spread (123pips) bear closing slightly off the low on low vol<4weeks. The candle close and volume suggests reduced selling pressure.

DAY- The candle is a small spread (37pips) bear closing at the low on low vol>2days. The candle close suggests more downside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Euro has remained under pressure with a US rate rise still on the table for December. Post NDP, price has gone below the previous 1.0800 potential demand level and headed to retest the April pivot 1.0518

The Oanda order book shows newly trapped short position volumes. 

Potential demand stacks:  no significant stacks

Potential supply stacks: no significant stacks

Potential long (trapped) stops:  1.0556-1.0540, 1.0492-1.0476
Potential short (trapped) stops: 1.0653-1.0662, 1.0683-1.0714

With the poor housing data giving SM the fuel to fade upwards, SM is likely to continue fading weak shorts to 1.0660 level or higher before continuing down.   

EU long levels: 1.0580 

EU short levels: 1.0600-1.0610, 1.0670, 1.0710, 1.0725-1.0731, 1.0791, 1.0807-1.0825, 1.0843-1.0855, 1.0863-1.0873, 1.0896 


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. The downward bias is still dominant. 

MONTH-  The candle is a below average spread (503pips) bear closing just off the low on low vol<1month. The candle close and volume suggests more downside.

WEEK- The candle is a below average spread (167pips) bear closing at the low on low vol<2weeks. The candle close and volume suggests more downside.
DAY- The candle is a below average (75pips) bull pseudo "spring" closing on low vol<9days. The candle close and volume suggests a lack of selling pressure.

Demand: Weekly/Daily:  1.4870 - 1.4812, 1.4229 Supply: Short term: 1.5574, 1.5600, 1.5619 

The Oanda order book shows profitable short positions and newly trapped shorts. 

Potential demand stacks: Not significant
Potential supply stacks: Not significant

Potential long (trapped) stops:  1.4850-1.4794

Potential short (trapped) stops: 1.5117-1.5139, 1.5150-1.5164

George Carney will be speaking later followed by data releases. As I wrote yesterday, prices are being positioned as many weak trapped shorts are still in the mix and unlikely to stomach a 100 pips move against their position. SM is likely to fade weak shorts up to around 1.5120 or higher before reversing. 

GU long levels:  1.5025, 1.4900

GU short levels: 1.5135, 1.5154-1.5166

Simple advise: Just a caution against those attempting breakout strategies, it is more often than not, a sure way to blow one's account. This is a business of orders. Look for where the orders are to trade. 

Posted at 12.35 am EST