DAILY REVIEW 19 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 a below average spread (163pips) bear closing near the low on low vol<6weeks. The candle close suggests more downside.

DAY- The candle is an above average spread (102pips) bear closing at the low on low vol>2days. The candle close and volume suggests more downside.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Mixed US data with better business inventories and retail sales being stymied by employment and lower than expected PPI demand. After a steady discounting earlier, SM takes profit (in my opinion) and USD "strengthens" again when in fact, nothing has changed, there is no deadline for the FED's next rate hike, there is no new magic from Draghi. 

Oanda order book:  There trapped short volumes but very thin.

Potential demand stacks:  1.1153-1.1140

Potential supply stacks: not applicable

Potential long (trapped) stops:  1.1311-1.1290
Potential short (trapped) stops: not applicable

The hawkish FOMC position suggesting a rate hike for June is really nothing new. It must be said that this is still "provided that data supports it". As it were, there was already significant discounting of EU price prior to the FOMC minutes release. SM is likely to continue to push out as many weak shorts as possible to the 1.1260 level or higher before reversing.

EU long levels: 1.1200, 1.1185, 1.1170, 1.1150

EU short levels:  1.1265, 1.1291, 1.1311, 1.1345, 1.1386, 1.1397-1.1420, 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 a below average spread (190pips) bear "upthrust" closing on low vol<6weeks. The candle close suggests more downside.
DAY- The candle is a large spread (230pips) bull large-body spinning top closing on high vol>9days. Th 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 thin but overall trapped short volumes are still in play.

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

Potential long (trapped) stops: 1.4555-1.4527

Potential short (trapped) stops: 1.4595-1.4650, 1.4757-1.4805

The UK Core Retail Sales data is out soon, depending on the news, SM may whipsaw down before going back up or take weak shorts out before diving. SM is likely to fade weak shorts to the 1.4670 level or higher before reversing.

GU long levels: 1.4520, 1.4400, 1.4385, 1.4340-1.4330, 1.4310, 1.4300

GU short levels: 1.4670, 1.4700-1.4712, 1.4735, 1.4770, 1.4790, 1.4800 

Posted at 4.20 am EST