DAILY REVIEW 14 January 2016


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. December's candle suggests a retracement is in progress. We also note that there are no significant orders/ 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 (541pips) bull closing 1/3 off the high on low vol>2months. The candle close and volume suggests more upside. 

WEEK- The candle is a normal spread (236pips) bull "hammer" closing on high vol>2weeks. The candle close and volume suggest buying. 

DAY- The candle is a below average spread (82pips) bull pseudo-"hammer" closing on high vol>2days. The candle close and volume suggests buying.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: The markets as a whole were thrown into a turmoil with uncertainty owing to China's actions in devaluing the Chinese Yuan and consequent stock market downward spiral. The market will most likely have to wait for the next major impact data release which is the NFP out this Friday before it can establish a clear direction.

The Oanda order book shows a majority of net trapped short positions volumes. 

Potential demand stacks:  1.0800-1.0789, 1.0700-1.0690, 1.0677-1.0664, 1.0608-1.0595

Potential supply stacks: N.A.

Potential long (trapped) stops:  N.A. 
Potential short (trapped) stops: 1.0939-1.0950, 1.0978-1.0987, 1.1055-1.1066 

Yesterday's price action was pretty much as expected ahead of tomorrow's NFP data release. Volume is still very thin. SM is likely to test the 1.0968 pivot of 11 Jan or higher before reversing.

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

EU short levels: 1.0970, 1.0983-1.1000, 1.1060, 1.1105, 1.1208

GU Analysis:

GU: Perspective: GU has closed below April pivot 1.4564. 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 (507pips) bear closing at the low on low vol>1month. The candle close and volume suggests more downside.

WEEK- The candle is an above average spread (309pips) bear closing near the low on high vol>18weeks. The candle close and volume suggests more downside.
DAY- The candle is a below average spread (96pips) bear spinning top closing on very high vol>2days. The candle close and volume suggests buying activity.

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

The Oanda order book shows extremely thin overall volumes with newly trapped shorts in the majority. 

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

Potential long (trapped) stops:  1.4351-1.4375, 1.4169-1.4060

Potential short (trapped) stops: 1.4470-1.4482, 1.4607-1.4615, 1.4700-1.4710

Volumes are too thin to trade and I will suggest stepping aside. 

GU long levels:  not applicable

GU short levels: 1.4500, 1.4535, 1.4600

Posted at 7.33 am EST