DAILY REVIEW 12 May 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 a low spread (250pips) bull hammer closing on low vol<19months. The candle close and volume suggests more upside.  

WEEK- The candle is an above average spread (230pips) bear "upthrust" closing at the low on low vol<1week. The candle close suggests more downside.

DAY- The candle is a normal spread (78pips) bull closing just off the high on low vol<31days. The candle close and volume suggests more upside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: With there being no clear deadline for the much expected FED rate hike and less than stellar data, the USD continues to weaken. 

Oanda order book:  Trapped long volumes are the significant bunch and in play.

Potential demand stacks:  1.1330-1.1320, 1.1246-1.1230, 1.1210-1.1195, 1.1151-1.1135

Potential supply stacks: not applicable

Potential long (trapped) stops:  not applicable
Potential short (trapped) stops: 1.1440-1.1450

Medium impact Euro and US news today. The long volumes are now in drawdown, expect SM to maintain selling pressure to fade weak shorts to the 1.1400 level or lower before reversing.

EU long levels: 1.14001-1.1390, 1.1380, 1.1350, 1.1320, 1.1310-1.1300, 1.1275-1.1260, 1.1250-1.1240, 1.1228

EU short levels:  1.1452, 1.1485-1.1491, 1.1500-1.1510, 1.1520-1.1525, 1.1532, 1.1580, 1.16001.1615, 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 (665pips) bull hammer closing on low vol<2months. The candle close and volume suggests more upside.

WEEK- The candle is an above average spread (354pips) bear upthrust closing on low vol<1week. The candle close and volume suggests more downside.
DAY- The candle is a below average spread (92pips) doji closing on low vol<6days. 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: Trapped short volumes are less significant, of more significance are the trapped long volumes.

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

Potential long (trapped) stops:  1.4423-1.4408, 1.4390-1.4338, 1.4317-1.4309, 1.4314-1.4300

Potential short (trapped) stops: 1.4453-1.4461, 1.4480-1.4494, 1.4549-1.4558, 1.4600-1.4610

We have the UK rate decision and other high impact news today. Based on yesterday's price action and trapped positions, expect SM to use the news release to whipsaw to clear the weak longs trapped and then reverse. SM is likely to fade weak longs to the 1.4420 level or lower before reversing.

GU long levels: 1.4420-1.4400, 1.4385-1.4375, 1.4361, 1.4335, 1.4310, 1.4300

GU short levels: 1.4482-1.4495, 1.4512-1.4521, 1.4535, 1.4554, 1.4570-1.4577, 1.4595, 1.4633, 1.4700-1.4712, 1.4730, 1.4770, 1.4790, 1.4800 

Posted at 3.00 am EST