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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 while February's candle also closed back inside the January range. 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 (217pips) bull closing near the high on low vol<4weeks. The candle close suggests more upside.
DAY- The candle is a below average spread (88pips) bear closing 2/3 off the low on low vol<1day. The candle close and volume suggests buying and possible upside.
Background: Last Friday's NFP figures were strong and as can be expected with the order stacks, made for SM shark feeding. The strong figures basically gave the retail crowd the basis to buy the USD, with EURUSD plunging as shorts were induced by the news release but only to 1.0902 after which SM had sufficient orders to start the upward climb pushing all the way to 1.1042 before initial profit taking.
Oanda order book: trapped shorts still form the bulk of the volume distribution.
With the Euro interest rate decision and the ECB Press Conference later today, we can expect high volatility, perhaps that is why even though yesterday's price action read was correct, price did not quite make it all the way to 1.1067. SM will oscillate price to build positions for the next move. Yesterday, I wrote "SM is likely to test the 1.0940 H4 pivot to induce more shorts before fading them to the 1.1067 H4 pivot or higher", this may still hold true today. A close below this will likely see more downside.
EU short levels: 1.1065, 1.1093, 1.1129
Potential demand stacks: 1.0853-1.0825
Potential supply stacks: not applicable
Potential long (trapped) stops: not applicable
Potential short (trapped) stops: 1.1030-1.1040, 1.1067-1.1100, 1.1108-1.1128
Potential short (trapped) stops: 1.1030-1.1040, 1.1067-1.1100, 1.1108-1.1128
With the Euro interest rate decision and the ECB Press Conference later today, we can expect high volatility, perhaps that is why even though yesterday's price action read was correct, price did not quite make it all the way to 1.1067. SM will oscillate price to build positions for the next move. Yesterday, I wrote "SM is likely to test the 1.0940 H4 pivot to induce more shorts before fading them to the 1.1067 H4 pivot or higher", this may still hold true today. A close below this will likely see more downside.
EU long levels: 1.0950-1.0940, 1.0850-1.0830
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 above average spread (412pips) bull closing near the high on average vol<5weeks. The candle close suggests more upside.
DAY- The candle is a below average spread (64pips) doji closing on low vol>2days. The candle close and volume suggests more downside.
DAY- The candle is a below average spread (64pips) doji closing on low vol>2days. The candle close and volume suggests 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 both trapped shorts and longs across the volume distribution without a clear bias.
Potential demand stacks: Not significantPotential supply stacks: Not significant
Potential long (trapped) stops: 1.4178-1.4151, 1.4132-1.4100
Potential short (trapped) stops: 1.4271-1.4305, 1.4351-1.4359, 1.4450-1.4471
Yesterday, I wrote, "SM is likely to continue fade weak shorts to the 1.4270 level or higher before reversing", it did not quite make it there, possibly because of the long trapped volume. SM may well use the Euro rate decision to manipulate EURGBP and hence GBP. SM is likely to maintain selling pressure to 1.4150 or lower taking out the weak longs before reversing. The volumes are really thin and stretched out across the range, look for trade setups only at structure high/low and/or supply/demand levels.
GU long levels: Not Applicable
Posted at 2.47 am EST
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