DAILY REVIEW 21 December 2015

Hi folks,
The network connectivity still has issues. It connects but loads very slow. Anyway I'll just analyse and post the review first.

Cheers
Trek Trader


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 average spread (257pips) bear spinning top closing on high vol>15weeks. The candle close suggests more downside but the volume suggests buying. 

DAY- The candle is a below average spread (69pips) bull closing near the high on low vol>1day. The candle close and volume suggests more upside. 

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 significant net trapped short positions. 

Potential demand stacks:  1.080-1.0789, 1.0700-1.0690, 1.0677-1.0664

Potential supply stacks: 1.1243-1.1253

Potential long (trapped) stops:  1.0792-1.0772, 1.0743-1.0732 
Potential short (trapped) stops: 1.0911-1.0970, 1.1068-1.1081 

Now in the aftermath of the FED's rate decision, we see a lot of weak shorts in drawdown. Without any major data releases today, SM is likely to fade weak shorts to around the 1.0960 level or higher before reversing. 

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

EU short levels: 1.0980, 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 a large spread (366pips) bear closing at the low on average vol>1week. The candle close and volume suggests more downside.
DAY- The candle is a small spread (64pips) bear dragon-fly doji, closing on low vol<2days. The candle close and volume suggests no 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 more trapped long positions. 

Potential demand stacks: nothing significant
Potential supply stacks: 1.5090-1.5103, 1.5290-1.5305

Potential long (trapped) stops:  1.5862-1.5854, 1.4844-1.4835

Potential short (trapped) stops: 1.4917-1.4926, 1.4958-1.4967, 1.5000-1.5075

The volumes are very thinly spread as prices nose dived on Dollar strength following the FED's rate decision. There are also fresh weak shorts. With UK data only due tomorrow, SM is likely to fade weak shorts to around the 1.4950 level or higher before reversing to continue the downward move. 

GU long levels:  no significant levels

GU short levels: 1.4950-1.4967, 1.5000, 1.5050, 1.5075, 1.5100, 1.5220, 1.5290-1.5315

Posted at 12.09 am EST