DAILY REVIEW 16 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 normal spread (121pips) bear closing about 1/5 off the low on low vol<8days. The candle close suggests more downside with reduced selling pressure.

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 but with a fresh stack of trapped longs around the 1.1170 level.  

Potential demand stacks:  1.1265-1.1225, 1.0951-1.0932

Potential supply stacks: 1.1430-1.1450

Potential long (trapped) stops:  1.1123-1.1100
Potential short (trapped) stops: 1.1403-1.1415 

There is no significant news release today on either the Euro or USD. SM is likely to fade weak longs to the 1.1120 level or lower before reversing.

EU long levels: 1.1120, 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 (122pips) bear closing near the low on low vol<10days. The candle close suggests more downside with reduced selling pressure.  

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

The mixed UK news releases eralier today has not resulted in any significant downward movement. SM is likely to induce shorts at around the 1.4350 before reversing.

GU long levels: 1.4360

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

Posted at 6.37 am EST