DAILY REVIEW 8 February 2016

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I wish all my Chinese friends a Happy and Prosperous Chinese New Year!

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Trek Trader


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 (431pips) bull closing off the high on high vol>6weeks. The candle close and volume suggests more upside.  

DAY- The candle is a large spread (137pips) bear spinning top closing on high vol<2days. The candle close and volume suggests selling absorption. 

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 net trapped short volumes and new trapped long volumes. 

Potential demand stacks:  1.0804-1.0765

Potential supply stacks: 1.1395-1.1405

Potential long (trapped) stops:  1.1108-1.1099, 1.0676-1.0660, 1.0635-1.0622
Potential short (trapped) stops: 1.1305-1.1315 

The NFP data last Friday was somewhat of a mixed-bag, SM is likely to test 1.1100 or lower before reversing to continue northbound. Volumes are thin but still reasonable.

EU long levels: 1.1100, 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 large spread (440pips) bull closing about 1/3 off the high on very high vol>22days. The candle close and volume suggests more upside.
DAY- The candle is a below average spread (138pips) bear closing about 1/3 off the low on low vol<2days. The candle close suggests more downside.  

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

The Oanda order book: newly profitable short volumes can be seen but trapped long volumes are in the majority now.

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: 1.4535-1.4615, 1.4670-1.4720, 1.4754-1.4767,1.4822-1.4842, 1.4868-1.4890

The volumes are still really very thin and caution is advised. SM is likely to remove more trapped long volumes before pushing up further. SM is likely to push lower to 1.4380 level or lower before reversing.

GU long levels:  1.4380, 1.4360

GU short levels: 1.4700, 1.4800-1.4815

Posted at 7.29 am EST