DAILY REVIEW 11 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 an above average spread (463pips) bull closing about 1/5 off the high on high vol>13weeka. The candle close and volume suggests more upside.

DAY- The candle is a normal spread (98pips) bear closing near low on low vol<1day. 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. At last Thursday's ECB press conference, Mario Draghi's policies levitated the EU about 470 pips that not even a decent NFP could reverse. 

The Oanda order book shows significantly more trapped short positions with newly trapped shorts from the 1.0926 level. 

Potential demand stacks:  1.080-1.0789, 1.0700-1.0690, 1.0685-1.0673

Potential supply stacks: 1.1243-1.1253

Potential long (trapped) stops:  1.0928-1.0910 
Potential short (trapped) stops: 1.1033-1.1067 very thinly spread

Major US data due later today is likely to give SM the fuel to push further upwards. SM is likely to retest the day low at 1.0925 or lower to induce more shorts before going back upwards. Volumes have petered out a bit this week after the ride on Draghi's magic carpet so we may see a bit of whipsaw as SM build volume before moving.   

EU long levels: 1.0890, 1.0800-1.0795, 1.0762-1.0740, 1.0700  

EU short levels: 1.1040-1.1055, 1.1091-1.1100


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 an above average spread (263pips) bull closing about 1/4 off the high on very high vol>13weeks. The candle close and volume suggests buying. However, we are not at any clear supply/demand level and it could be a fade to clear stops before continuing.
DAY- The candle is a below average spread (90pips) bear hanging man closing on low vol<2days. The candle close and volume suggests no selling interest.

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

The Oanda order book shows more trapped short positions. 

Potential demand stacks: 1.5000-1.4996
Potential supply stacks: 1.5290-1.5305

Potential long (trapped) stops:  1.4893-1.4880

Potential short (trapped) stops: 1.5155-1.5212

The volumes are thin and spread out. SM is likely to fade weak shorts to retest yesterday's high 1.5200 level or higher before reversing. 

GU long levels:  1.5025, 1.4900

GU short levels: 1.5220, 1.5290-1.5315

Posted at 3.38 am EST