DAILY REVIEW 12 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 below average spread (102pips) bull upthrust closing about 1/2 off the high on ultrahigh vol>119days. The candle close and volume suggests a changing of positions but a prices will likely push up to retest before reversing.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Tumbling oil prices with the expected additional supply of Iranian oil also creates further uncertainty. FED Chair Yellen's testimony suggesting that no further rate hike is on the cards anytime soon continues to fuel the bulls.

The Oanda order book shows both net trapped short volumes and new trapped long volumes with the cumulative volume trapped short in the majority. 

Potential demand stacks:  1.1265-1.1225, 1.0951-1.0932

Potential supply stacks: 1.1430-1.1450

Potential long (trapped) stops:  1.1140-1.1045
Potential short (trapped) stops: 1.1355-1.1362, 1.1403-1.1415 

The Euro GDP, US Retail Sales data and the Michigan Expectations will be the main drivers today. SM went only went to 1.1274 before continuing northbound making a new high of 1.1375 before retracing. SM is likely to retest Asia low 1.1292 or lower before reversing to retest yesterday's high.

EU long levels: 1.1220, 1.1200  

EU short levels: 1.1360, 1.1400-1.1410, 1.1421-1.1430

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 very large spread (181pips) bear closing more than 1/2 above the low on ultrahigh vol>118days. The candle close and volume suggest selling absorption.  

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

The Oanda order book: there are about equal newly trapped long volumes and profitable long volumes that are significant.

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

Potential long (trapped) stops:  1.4483-1.4427, 1.4344-1.4327, 1.4144-1.4105

Potential short (trapped) stops: 1.4525-1.4540, 1.4600-1.4615, 1.4664-1.4736, 1.4820-1.4840, 1.4868-1.4887

Yesterday's bummer manufacturing data was the trap for shorts as SM allowed them to dive in and then trap them. Volumes are thin across the price range with about equal trapped volume both ways. SM is likely to oscillate to fade weak shorts to 1.4600 level or higher before reversing.

GU long levels: 1.4420-1.4395, 1.4360

GU short levels: 1.4600-1.4615, 1.4665-1.4680, 1.4700, 1.4732, 1.4800-1.4815

Posted at 2.49 am EST