DAILY REVIEW 31 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 (132pips) bear closing at the low on low vol<11weeks. The candle close suggests more downside and volume suggests smart money fade.

DAY- The candle is a small spread (47pips) bull cloing near the high on low vol<11days. The candle close and volume suggests lack of selling pressure.

Levels of interest: Demand: Daily/Weekly:  1.0000  

Background: Last Friday, FED Chair Janet Yellen said, "It's appropriate, and I've said this in the past, I think for the Fed to gradually and cautiously increase our overnight interest rate over time and probably in the coming months, such a move would be appropriate,"  and so the USD bulls returned late on Friday. 

Oanda order book:  Trapped longs are evident and now joined by newly trapped short volumes at around the 1.1100 level.  

Potential demand stacks:  1.1124-1.1110, 1.1100-1.1090

Potential supply stacks: not applicable

Potential long (trapped) stops:  1.1037-1.1030, 1.0974-1.0965, 1.0950-1.0936
Potential short (trapped) stops: 1.1155-1.1167, 1.1215-1.1221

First, I made a mistake yesterday, TODAY is the last day of May and being the last trading day of May, what I said yesterday holds , "it is also possible for whipsaw moves as SM takes profits and new positions for the following month tomorrow." SM is likely to retest the current day high of 1.1154 or higher before reversing.

EU long levels:  1.1120, 1.1090, 1.1050, 1.1035, 1.1000

EU short levels:  1.1154, 1.1200, 1.1217, 1.1250, 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 normal spread (297pips) bull closing about 1/3 off the high on low vol>2weeks. The candle close suggests more upside and the volume suggests initial selling.
DAY- The candle is a small spread (54pips) bull closing near the high on low vol<9days. The candle close and volume suggests lack of selling pressure. 

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

The Oanda order book: Trapped longs above 1.4690 and trapped shorts around 1.4610. 

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

Potential long (trapped) stops: 1.4574-1.4565, 1.4546-1.4541, 1.4444-1.4433, 1.4425-1.4415

Potential short (trapped) stops: 1.4766-1.4785, 4796-1.4824

There is no major UK news today. Yesterday, I wrote, "SM is likely to fade the weak shorts to the 1.4660 level or higher before reversing." The weak shorts have been faded to 1.4724. SM is likely to fade the weak longs now to 1.4633 or lower before retesting today's high of 1.4724.

GU long levels: 1.4633, 1.4600, 1.4570, 1.4500, 1.4485, 1.4400, 1.4385, 1.4340-1.4330, 1.4310, 1.4300

GU short levels: 1.4700, 1.4724, 1.4770, 1.4790, 1.4800-1.4820 

Posted at 01.12 am EST