DAILY REVIEW 2 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 a below average spread (180pips) bull pseudo "upthrust" closing on low vol<3weeks. The candle close and volume suggests no selling pressure.  

DAY- The candle is a normal spread (98pips) bull closing about 1/5 off the high on low vol<9days. 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 shows a  majority of net trapped short positions volumes. 

Potential demand stacks:  1.0804-1.0765

Potential supply stacks: 1.0957-1.0988

Potential long (trapped) stops:  1.0824-1.0835, 1.0673-1.0660, 1.0635-1.0622
Potential short (trapped) stops: 1.0980-1.0992, 1.1002-1.1020, 1.1060-1.1017, 1.1093-1.1122 

Price pushed higher as we expected yesterday with a new high at 0.0919 today. Without major Euro or US data releases today, SM is likely to continue to fade weak shorts to the 1.0950 level or higher before reversing.

EU long levels: 1.0800-1.0795, 1.0762-1.0740, 1.0700  

EU short levels: 1.0983-1.1000, 1.1060, 1.1105, 1.1208

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 normal spread (264pips) bear spinning top closing on high vol>21weeks. The candle close and volume suggests buying.
DAY- The candle is an ultra-large spread (217pips) bull closing near the high on low vol<4days. The candle close and volume suggests more upside. 

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

The Oanda order book: volumes are really thin and not significant.

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

Potential long (trapped) stops:  1.4228-1.4200, 1.4152-1.4136, 1.4075-1.4021 (small vol)

Potential short (trapped) stops:1.4410-1.4472, 1.4534-1.4544, 1.4695-1.4755

The volumes remain very thin and caution is advised. The poor UK PMI released earlier will serve as the trap for weak shorts, SM is likely to test the 1.4500 key level or higher before reversing.

GU long levels:  1.4100

GU short levels: 1.4512, 1.4535, 1.4595-1.4610

Posted at 5.11 am EST