DAILY REVIEW 10 February 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 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 an above average spread (431pips) bull closing off the high on high vol>6weeks. The candle close and volume suggests more upside.  

DAY- The candle is a very large spread (175pips) bull "large bodied" spinning top closing on very high vol>116days. 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 to show net trapped short volumes and new trapped long volumes. 

Potential demand stacks:  1/1218-1.1210, 1.0951-1.0932

Potential supply stacks: 1.1395-1.1405

Potential long (trapped) stops:  1.1190-1.1180, 1.1129-1.1100, 1.1090-1.1075
Potential short (trapped) stops: 1.1305-1.1315, 1.1333-1.1345, 1.1406-1.1417 

FED Chair Janet Yellen is due to testify before the Joing Economic Committee later today and this will likely be the catalyst for SM to move. SM is likely to fade the newly trapped weak longs to around 1.1250 or lower before reversing to continue northbound. Volumes are thin.

EU long levels: 1.1100, 1.1047, 1.1000, 1.0800-1.0795  

EU short levels: 1.1300, 1.1350, 1.1400

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 large spread (440pips) bull closing about 1/3 off the high on very high vol>22days. The candle close and volume suggests more upside.
DAY- The candle is a below average spread (137pips) bull spinning top closing on very high vol>116days. The candle close and volume suggests selling absorption and more upside.  

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

The Oanda order book: newly trapped short volumes can are now significant.

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

Potential long (trapped) stops:  1.4460-1.4371, 1.4344-1.4325, 1.4152-1.4109

Potential short (trapped) stops: 1.4542-1.4566, 1.4605-1.5612, 1.4657-1.4683, 1.4703-1.4739, 1.4788-1.4799,1.4820-1.4840, 1.4868-1.4887

High impact manufacturing data release later will be the main driver. SM is likely to fade weak shorts to 1.4545 level or higher before reversing.

GU long levels:  1.4380, 1.4360

GU short levels: 1.4550-1.4565, 1.4665-1.4680, 1.4700, 1.4732, 1.4800-1.4815

Posted at 2.26 am EST