DAILY REVIEW 19 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 below average spread (78pips) bear spinning top closing on low vol<2days. The candle close and volume suggests reduced selling pressure but with more downside expected.

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.

Oanda order book: one the whole, volumes are very thin but there are newly profitable and trapped trapped shorts forming the bulk of the volume distribution.  

Potential demand stacks:  1.1005-1.0990, 1.0955-1.0945

Potential supply stacks: no significant stacks

Potential long (trapped) stops:  1.1047-1.1035
Potential short (trapped) stops: 1.1105-1.1115, 1.1140-1.1150 

With the US Core CPI data release later, SM is already creating selling pressure. SM is likely to maintain selling pressure to yesterday's low 1.1070 or lower before reversing. 

EU long levels: 1.1070, 1.1040, 1.0980  

EU short levels: 1.1105-1.1115, 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 near usually large spread (138pips) bull closing about 1/2 off the high on average vol<1days. The candle close an volume suggests initial buying. 

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

The Oanda order book: trapped trapped shorts forming the bulk of the volume distribution.

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

Potential long (trapped) stops:  1.4233-1.4216, 1.4070-1.4040

Potential short (trapped) stops: 1.4390-1.4406, 1.4578-1.4605, 1.4667-1.4677, 1.4700-1.4715

The strong UK retail sales released failed to keep the GBP from tanking as SM fade the weak news traders. SM is likely to maintain selling pressure to test the 1.4234 level or lower before reversing.

GU long levels: 1.4275, 1.4234, 1.4190

GU short levels: 1.4420, 1.4485, 1.4500, 1.4600-1.4615, 1.4665-1.4680, 1.4700, 1.4732, 1.4800-1.4815

Posted at 5.03 am EST