DAILY REVIEW 19 January 2016

Sorry folks I'm not well today so posting is delayed and only for EU.

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 below average soread (179pips) doji closing on high vol<1week. The candle close and volume suggests selling absorption and more upside. 

DAY- The candle is a small spread (59pips) bear closing about 1/2 off the low on low vol<10days. The candle close suggests more upside.

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 (my apologies, it should be the US retail sales data) out later Friday before it can establish a clear direction.

The Oanda order book shows a majority of net trapped short positions volumes but with fresh volume trapped long as well. 

Potential demand stacks:  N.A.

Potential supply stacks: N.A.

Potential long (trapped) stops:  1.0870-1.0860 
Potential short (trapped) stops: 1.0909-1.0910, 1.1070-1.1080, 1.1095-1.1112 

The EUR CPI due out later today will be the catalyst for SM to move. SM is likely to test yesterday's low 1.0867 or lower to induce shorts before reversing to last week's high 1.0983 or higher before reversing.

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

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

Posted at 8.00 am EST