DAILY REVIEW 15 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 (289pips) bull closing about 1/3 off the high on ultrahigh vol>23weeks. The candle close and volume suggests profit taking. Some more upside can be expected.  

DAY- The candle is a near-normal spread (119pips) bear closing about 1/3 off the low on high vol<3days. T^he candle close and volume suggest 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. 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 very thin volume across the price range with trapped shorts still dominant.  

Potential demand stacks:  1.1265-1.1225, 1.0951-1.0932

Potential supply stacks: 1.1430-1.1450

Potential long (trapped) stops:  1.1140-1.1075
Potential short (trapped) stops: 1.1403-1.1415 

As could reasonably be expected, prices retraced downwards to fade out weak longs. There is no significant data release today except for ECB's Dragh's speech. It will be the catalyst for positioning and moving prices today. SM is likely to 1.1135 or lower before reversing.

EU long levels: 1.1100  

EU short levels: 1.1330, 1.1375, 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 below average spread (226pips) doji closing on ultrahigh vol>23weeks. The candle close and volume suggests absorption of selling.
DAY- The candle is a below average spread (127pips) bull closing about 2/3 off the high on high vol<3days. The candle close and volume suggests absorption of selling.  

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 and short volumes with maybe slightly more trapped long.

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

Potential long (trapped) stops:  1.4483-1.4463, 1.4350-1.4330, 1.4144-1.4105

Potential short (trapped) stops: 1.4561-1.4621, 1.4670-1.4730, 1.482-1.4898

Volumes are really thin across the price range and without major data releases today, expect the price to oscillate. SM is likely to fade weak longs to around 1.4450 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 3.57 am EST