DAILY REVIEW 28 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 near-normal spread (198pips) bear closing near the low on low vol<2weeks. The candle close suggests more downside. 

DAY- The candle is a below average spread (66pips) bull spinning top closing on low vol>2days. The candle close and volume suggests more upside. 

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Tumbling oil prices with the expected additional supply of Iranian oil also creates further uncertainty.

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

Potential demand stacks:  N.A.

Potential supply stacks: N.A.

Potential long (trapped) stops:  1.0677-1.0660, 1.0639-1.0612
Potential short (trapped) stops: 1.0922-1.0930, 1.0982-1.0990, 1.1060-1.1017, 1.1093-1.1122 

The US data to be released later will be the catalyst as usual. Yesterday I wrote "Expect a continuation upward to retest the day high or higher before reversing" and true to form, price tested 1.0915 before retracing. However, with the trapped volume pretty much in play, a spike to 1.1000 is not out of the question. SM is likely to continue fading weak shorts by retesting the 1.0915 level or higher.

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

EU short levels: 1.0915-1.0927, 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 (282pips) bull "near doji" closing 2/3 off the low on high vol>20weeks. The candle close and volume suggests buying.
DAY- The candle is a normal spread (125pips) bear closing at the low on average vol>2days. The candle close and volume suggests more downside. 

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

The Oanda order book shows a significant volume of trapped longs.

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

Potential long (trapped) stops:  1.4228-1.4200, 1.4179-1.4156, 1.4075-1.4021 (small vol)

Potential short (trapped) stops: 1.4360-1.4385, 1.4696-1.4729

The volumes remain very thin and caution is advised. With UK data expected later today, SM is likely to test the 1.4200 key level or lower before reversing.

GU long levels:  1.4100

GU short levels: 1.4365, 1.4425, 1.4512, 1.4535, 1.4600

Posted at 1.42 am EST