DAILY REVIEW 7 April 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 (589pips) bull closing at the high on low vol<1month. The candle close and volume suggests more upside.  

WEEK- The candle is an above average spread (285pips) bull closing near the high on low vol>1week. The candle close and volume suggests more upside. 

DAY- The candle is a near normal spread (104pips) bull closing about 1/4 off the high on high vol>2days. The candle close and volume suggests more upside. 

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Last Friday's NFP data was largely positive although the unemployment rate was revised to 5% from 4.9% with other adjustments negligible. The FED's dovish stance as espoused by FED Chair Janet Yellen leaves the USD in limbo, the market ignoring rate hike rhetoric by other FED members. The FOMC Minutes release this week will be telling.

Oanda order book:  Trapped short volumes remain overwhelmingly significant. 

Potential demand stacks:  1.1303-1.1295, 1.1285-1.1267, 1.1257-1.1228, 1.1211-1.1200, 1.1153-1.1140

Potential supply stacks: not applicable

Potential long (trapped) stops:  1.1326-1.1319
Potential short (trapped) stops: 1.1432-1.1450, 1.1500-1.1600,1.16181.1625, 1.1670-1.1680

The release of the FOMC Minutes only served to confirm a data-based rate hike and not a date-based rate hike which serves to weaken the USD in the short term. As expected, SM induced shorts in order to accumulate long positions resulting in a run up to 1.1431, just shy of the current 1.4137 high before fading but the trapped shorts are still in the majority as cattle led to the slaughter. SM has pushed to current Asia high of 1.4123 and may not retest Asia low before breaking past 1.4137 toward the next daily pivot of 1.4194. SM are likely to create selling pressure to Asia low 1.3191 or lower before reversing to test 1.4137. If it does not test Asia low, it will test the 1.4000 key level. The daily volume divergence remains in play and if price does break above, will present short opportunities.

EU long levels: 1.1390, 1.1350, 1.1320, 1.1290-1.1284,1.1272, 1.1253

EU short levels: 1.1450, 1.1494-1.1505, 1.1527-1.1540, 1.1600, 1.1619-1.1630, 1.1711

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 an above average spread (610pips) bull closing off the high on low vol<1month. The candle close and volume suggests more upside.

WEEK- The candle is an above average spread (340pips) bull "upthrust" closing on low vol>1week. The candle close suggests initial buying.
DAY- The candle is a large spread (165pips) bear "spring" closing on high vol>2days. The candle close and volume suggests buying. 

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

The Oanda order book: Volume is very thin and a slightly more trapped short volume at this point in time.

Potential demand stacks: not significant
Potential supply stacks: not significant

Potential long (trapped) stops:  1.4128-1.4108, 1.4051-1.4041

Potential short (trapped) stops: 1.4167-1.4220, 1.4232-1.4241, 1.4251-1.4285, 1.4335-1.4346

Yesterday as expected, SM faded weak shorts but only reached 1.4170 instead of 1.4200 key level, this is likely to continue as USD continues to weaken. We have UK medium impact housing data later which will provide the fuel to push price to 1.4200 key level or higher before reversing. SM may use news to whipsaw the price before going back long.

GU long levels:  1.4100-1.4090, 1.4000-1.3990

GU short levels: 1.4200, 1.4225, 1.4243, 1.4265, 1.4290,1.4300, 1.4342-1.4350, 1.4365-1.5385, 1.4400-1.4410, 1.4450-1.4460, 1.4485, 1.4515, 1.4600

Posted at 2.13 am EST