DAILY REVIEW 5 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 very large spread (169pips) bull large-bodied spinning top closing off the high on very high vol>42days. 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 continues to show new net trapped short volumes. 

Potential demand stacks:  1.0804-1.0765

Potential supply stacks: 1.1395-1.1405

Potential long (trapped) stops:  1.0676-1.0660, 1.0635-1.0622
Potential short (trapped) stops: 1.1235-1.1245 

Prices pushed North as analyzed yesterday. With the NFP due later today, we can expect SM to take prices higher to remove the freshly trapped short traders. SM is likely to test 1.1300 or higher before reversing. Note that volumes are thin but still reasonable.

EU long levels: 1.1047, 1.1000, 1.0800-1.0795  

EU short levels: 1.1300, 1.1350, 1.1400

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 a below average spread (138pips) bear small-bodied spinning top closing on very high vol>3days. The candle close and volume suggests selling but price is still in no-man's land.  

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

The Oanda order book: newly profitable short volumes are less than the trapped long volumes.

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:1.4448-1.4479, 1.4535-1.4548, 1.4700-1.4770

The volumes are really very thin and caution is advised. Price should be on its way to test the 1.4800 key level. However, SM is likely to remove more trapped long volumes before pushing up further. The NFP later will be the catalyst for today. SM is likely to push lower to 1.4500 key level or lower before reversing to continue the North-bound retracement.

GU long levels:  1.4500

GU short levels: 1.4700, 1.4800-1.4815

Posted at 3.10 am EST