DAILY REVIEW 18 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 large spread (395pips) bull closing off the high on average vol>2weeks. The candle close and volume suggests more upside.  

DAY- The candle is an above average spread (136pips) bull large body spinning top closing on high vol>4days. 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 volumes are now seen clearly in both directions with overall more trapped shorts. 

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: not applicable

It's interesting that the USD continues to weaken despite what appears to be favourable initial employment data. There are some medium impact data release plus speeched by FOMC members later today. With the trapped volumes in play, SM is likely to maintain selling pressure to the 1.1277 level or lower to induce shorts before reversing to test the current high of 1.1341 and higher.

EU long levels: 1.1275, 1.1250-1.1230,1.1200, 1.1195, 1.1170, 1.1135-1.1120, 1.1100-1.1090

EU short levels: 1.1253-1.1275, 1.1335, 1.1352, 1.1384, 1.1473

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 a below average spread (319pips) bull closing near the high on near average vol<7weeks. The candle close and volume suggests more upside.
DAY- The candle is an ultralarge spread (282pips) bull large body spinning top closing on high vol>4days. 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 slightly more volume trapped long. There is no clear significant trapped positions.

Potential demand stacks: 1.4000-1.3990
Potential supply stacks: Not significant

Potential long (trapped) stops:  1.4439-1.4414, 1.4382-1.4371, 1.4341-1.4315, 1.4216-1.4200

Potential short (trapped) stops: 1.4488-1.4515, 1.4547-1.4557, 1.4702-1.4713

There is no UK news today. SM is is likely to fade the weak longs by maintaining selling pressure to the 1.4400 level or lower before reversing.

GU long levels: 1.4400, 1.4381-1.4365, 1.4264, 1.4220, 1.4100-1.4090, 1.400

GU short levels: 1.4485, 1.4500, 1.4603-1.4632, 1.4665-1.4680

Posted at 3.08 am EST