DAILY REVIEW 7 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 (120pips) bear closing about 1/3 off the low on ultrahigh vol<1day. The candle close and volume suggests buying. 

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 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 volume of newly trapped short positions. 

Potential demand stacks:  1.0700-1.0690, 1.0685-1.0673

Potential supply stacks: no significant stacks

Potential long (trapped) stops:  1.0850-1.0824, 1.0773-1.0762, 1.0745-1.0707 very thinly volume
Potential short (trapped) stops: 1.0884-1.0916, 1.0978-1.0986, 1.1001-1.1016 very thinly spread

The NFP last week gave SM the opportunity to take profit out of news traders as they faded them all after the news release before reversing but price never reached the Draghi high of 1.0980. With hardly significant stops above, the route up is cleared for higher moves. SM is likely to maintain selling pressure to around the NFP low of 1.0835 or lower before taking it back up to retest he 1.0980 or higher.   

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

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 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 (77pips) bear closing about 1/4 off the low on very high vol<1day. 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 very thin volume and majority trapped. 

Potential demand stacks: 1.5000-1.4996
Potential supply stacks: 1.5190-1.5212

Potential long (trapped) stops:  1.4996-1.4987, 1.4896-1.4871

Potential short (trapped) stops: 1.5115-1.5126, 1.5155-1.5173

With key UK data only due tomorrow, we can expect SM to continue the selling pressure. SM is likely to fade weak longs to around 1.5150 1.5050 (sorry typo error earlier) lower before reversing. 

GU long levels:  1.5025, 1.4900

GU short levels: 1.5097-1.5105, 1.5115-1.5125, 1.5155-1.5170, 1.5190-1.5215

Posted at 3.42 am EST