DAILY REVIEW 1 February 2016

Dear friends,

Last Friday, I did not post as I was at the doctor and it took much longer than expected. I should be back to daily posts this week except maybe Wednesday when I have a follow up with the doctor.

Cheers
Trek Trader


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 and January's candle is an "inside" of the December candle. 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 small range (274pips) bear spinning top closing on low vol<1month. The candle close and volume suggests no selling pressure. 

WEEK- The candle is a below average spread (180pips) bull pseudo "upthrust" closing on low vol<3weeks. The candle close and volume suggests no selling pressure.  

DAY- The candle is a large spread (138pips) bear closing off the low on high vol>5days. The candle close and volume suggests more downside. 

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 reveals a continuing majority of net trapped short positions volumes. 

Potential demand stacks:  N.A.

Potential supply stacks: N.A.

Potential long (trapped) stops:  1.0824-1.0835, 1.0677-1.0660, 1.0635-1.0628
Potential short (trapped) stops: 1.0884-1.0890, 1.0922-1.0930, 1.0980-1.0990, 1.1010-1.1020, 1.1060-1.1017, 1.1093-1.1122 

We will have the NFP later this Friday. In the meantime, we have key Euro and US manufacturing data releases later today followed by the ECB's Draghi speech. The last time Draghi opened his mouth, Euro levitated supernaturally so let's see what happens later. SM is likely fade weak shorts to the 1.0890 level or higher before reversing.

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

EU short levels: 1.0890, 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 an above average (736pips) bear closing about 1/4 off the low on low vol>4months. The candle close and volume suggests more downside.

WEEK- The candle is a normal spread (264pips) bear spinning top closing on high vol>21weeks. The candle close and volume suggests buying.
DAY- The candle is an ultralarge spread (264pips) bear closing nearly 1/2 off the low on very high vol>109days. The candle close and volume suggests buying. 

Demand: Weekly/Daily:  1.3705-1.3500 Supply: Short term: 1.5574, 1.5600, 1.5619 

The Oanda order book: volumes are really thin and not significant.

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

Potential long (trapped) stops:  1.4228-1.4200, 1.4152-1.4136, 1.4075-1.4021 (small vol)

Potential short (trapped) stops: 1.4328-1.4340, 1.4406-1.4419, 1.4458-1.4472, 1.4517-1.4550, 1.4696-1.4729

The volumes are very thin and caution is advised. With UK data expected later today, SM is likely to test the 1.4330 level or higher before reversing.

GU long levels:  1.4100

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

Posted at 1.24 am EST