DAILY REVIEW 11 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 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 an ultralarge monster spread (395pips) bull closing on very high vol>19days. The candle close and volume suggests more upside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

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.  

Potential demand stacks:  1.1086-1.1059, 1.0810-1.0770

Potential supply stacks: not applicable

Potential long (trapped) stops:  not applicable
Potential short (trapped) stops: 1.1113-1.1124

After the monster move resulting from the ECB rate decision and then Draghi's press conference, the volume is very thin as many traders' positions were washed out. More QE for the Euro may be a temporary boost but again, printing money in any way is still printing money and inevitably the currency will be dragged back down, contrast this with the US raising rates albeit cautiously. SM is likely to maintain selling pressure to the 1.1050 level or lower before reversing

EU long levels: 1.0950-1.0940, 1.0850-1.0830

EU short levels: 1.1065, 1.1093, 1.1129

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 an ultralarge spread (200pips) bull closing off the high on very high vol>10days. 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 extremely thin with majority of newly profitable long volumes.

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

Potential long (trapped) stops:  1.4291-1.4244, 1.4202-1.4191, 1.4122-1.4097

Potential short (trapped) stops: 1.414-1.4328, 1.4413-1.4430, 1.4450-1.4480, 1.4561-1.4568

Yesterday, I wrote, "SM may well use the Euro rate decision to manipulate EURGBP and hence GBP...... taking out the weak longs before reversing." and so it happened. There are newly profitable longs in the majority. Expect the daily ema 50 (1.4336) to come into play where the short stops are located (1.4305-1.4330). SM is likely to maintain buying pressure to the 1.4330 level and higher before reversing.

GU long levels: 1.4245

GU short levels: 1.4265-1.4283, 1.4305-1.4330, 1.4400, 1.4432, 1.4459, 1.4485, 1.4500, 1.4600-1.4615, 1.4665-1.4680

Posted at 7.28 am EST