DAILY REVIEW 24 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 an above average spread (284pips) bull spinning top closing on low vol<1week. The candle close and volume suggests more upside.  

DAY- The candle is a small spread (64pips) bear closing about 1/4 off the low on low vol<1day. The candle close and volume suggests more downside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: To put it in a nutshell, last week's FOMC minutes simply showed us that not all is as well as hoped, with the FED recognizing global economic challenges that may derail the US recovery, after all, what is industry without business? Therefore reducing the number of rate hikes to two for the year was a clear sign of safety first. To use a metaphor, no one wants to switch off the artificial life support system while the patient is still in danger. With the ECB pulling out its own bag of tricks, this makes for high volatility and a great trading month. 

Oanda order book:  newly trapped short and profitable volumes are clear. Trapped longs are relatively low in volume. 

Potential demand stacks:  1.1161-1.1150, 1.1103-1.1095

Potential supply stacks: not applicable

Potential long (trapped) stops:  1.1147-1.1141
Potential short (trapped) stops: 1.1182-1.1190, 1.1197-1.1210

We have the Euro Bulletin and US Core Durable data later today. will be the market moving catalyst. Yesterday, I wrote "SM is likely to maintain selling pressure to retest the current low 1.1165 level or lower to induce shorts before reversing", price went to 1.1159 and reversed from there. SM has new volume trapped short and are likely to fade weak shorts to 1.1200 or higher before reversing. Note that in the event stops at 1.1140 are cleared first followed by clear close above 1.1165, we can reasonably expect prices to start going long again.

EU long levels: 1.1155, 1.1135-1.1120, 1.1100-1.1090

EU short levels: 1.1260-1.1275, 1.1300, 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 large spread (462pips) bull pseudo-hammer closing on low vol<8weeks. The candle close and volume suggests a bear trap in place with upside expected.
DAY- The candle is a below average spread (145pips) bear closing slightly off the low on low vol<1day. 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 more significantly more new profitable volume short. 

Potential demand stacks: not applicable
Potential supply stacks: 1.4495-1.4505

Potential long (trapped) stops:  not applicable

Potential short (trapped) stops: 1.4177-1.4235, 1.4295-1.4325, 1.4390-1.4415

The UK Retails sales data will be released later. SM is is likely to whipsaw with the news by taking stops to 1.4227 before reversing retest the 1.4080 level or lower.

GU long levels: 1.4150-4130, 1.4100-1.4090, 1.400

GU short levels: 1.4200-1.4230, 1.4380-1.4400

Posted at 2.39 am EST