DAILY REVIEW 1 March 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 an above average spread (561pips) upthrust closing on average vol>7months. The candle close and volume suggests more downside. 

WEEK- The candle is a below average spread (213pips) bear closing at the low on low vol<3weeks. The candle close suggests more downside.  

DAY- The candle is a normal spread (103pips) bear inverted hammer closing on low vol<9days. The candle close and volume suggests reduced selling pressure.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Over the weekend, the G20 leaders agreed on "cooperation" to use all policy measures available for stability but apparently with nothing specific on currency manipulation. In essence, a lot of hot air with more of the same.

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

Potential demand stacks:  1.0869-1.0845

Potential supply stacks: 1.1092-1.1105

Potential long (trapped) stops:  not applicable
Potential short (trapped) stops: 1.0917-1.0931, 1.0963-1.0975, 1.1062-1.1082 

Welcome to March. We do have some major data releases today. With the bulk of traders trapped short, SM is likely to fade weak shorts to the 1.0942 level or higher before reversing to continue the downtrend.

EU long levels: 1.0855, 1.0820 , 1.0800

EU short levels: 1.0942, 1.0990, 1.1020, 1.1065

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 a large spread (832 pips) bear inverted hammer closing on average vol>10months. The candle close and volume suggests initial buying.

WEEK- The candle is an ultralarge spread (537pips) bear closing at the low on very high vol>1week. The candle close and volume suggests more downside.
DAY- The candle is a below average spread (110pips) bull closing about 1/4 off the high on low vol<11days. The candle close and volume suggests a retracement prior to more downside. 

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

The Oanda order book: volumes are extremely thin with trapped shorts now forming the bulk of the volume distribution.

Potential demand stacks: Not significant
Potential supply stacks: 1.4120-1.4160

Potential long (trapped) stops:  1.3836-1.3825, 1.3650-1.3600, 1.3570-1.3550

Potential short (trapped) stops: 1.4045-1.4075, 1.4225-1.4243

There is UK Manufacturing PMI data release today. Shorts are trapped and SM is likely to fade weak shorts to the 1.4045 level or higher before reversing to continue the down move.

GU long levels: 1.3865,  1.3835

GU short levels: 1.4050, 1.4075, 1.4120, 1.4234, 1.4360, 1.4420, 1.4485, 1.4500, 1.4600-1.4615, 1.4665-1.4680

Posted at 3.38 am EST