DAILY REVIEW 4 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 MONSTER spread (463pips bull closing off the high on ultrahigh vol>70days. 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 yesterday's ECB press conference, everything changed as Mario Draghi managed to do what magicians cannot, he made the Euro levitate about 470 pips. The combination of fresh QE measures sent European stock markets headed South and the Euro eating spinach! 

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:  1.0521-1.0511 very thinly spread
Potential short (trapped) stops: 1.0910-1.1012 very thinly spread

The "fundamentals" have changed yet again with Draghi's move, this may yet set the stage for a delayed rate rise. Either way, stops have been cleared all the way to 1.0980. The NFP data out later today will be key as to whether the FED will make that key decision. Having said that, as stops have been cleared above and this being a Friday as well, expect whipsawing as SM needs range to build orders volume. SM is likely to induce shorts at the day low around the 1.0550 level before taking it back up to retest the 1.0600 level and reverse to continue down.   

EU long levels: 1.0520 

EU short levels: 1.0980, 1.1020, 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 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 an ultralarge spread (254pips) bull closing slightly off the high on very high vol>70days. 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 very thin volume and majority trapped. 

Potential demand stacks: Not significant
Potential supply stacks: 1.5190-1.5212

Potential long (trapped) stops:  1.4982-1.4972, 1.4896-1.4871, 1.4839-1.4825

Potential short (trapped) stops: 1.5155-1.5170

The Cable had more than a lift from Draghi's action. SM has already moved downwards taking out weak longs and is likely to fade weak shorts to retest yesterday's high of 1.5157 or higher before reversing. 

GU long levels:  1.5025, 1.4900

GU short levels: 1.5155-1.5170, 1.5190-1.5215

Posted at 3.22 am EST