DAILY REVIEW 1 June 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 (518pips) bear closing at the low on low vol<9months. The candle close suggests more downside.  

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 (51pips) bear upthrust closing on very high vol>57days. The candle close and volume suggests more downside.

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:  The newly profitable short volumes at around the 1.1140 level with short volumes dominating.  

Potential demand stacks:  1.1113-1.1092

Potential supply stacks: not applicable

Potential long (trapped) stops:  1.1033-1.1020, 1.0978-1.0968, 1.0946-1.0936
Potential short (trapped) stops: 1.1130-1.1140, 1.1215-1.1221

We have the ADP Non-Farm and ISM Manufacturing data today. SM is likely to fade weak shorts to yesterday's Asia session high of 1.1154 or higher before reversing.

EU long levels:  1.1100-1.1090, 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 a below average spread (437pips) bear spinning top closing on high vol<3months. The candle close and volume suggests selling.

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 n ultra-large spread (259pips) bear closing near the low on ultra-high vol>310days. 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: Overall more trapped longs but volumes are very thin after month-end flows yesterday. 

Potential demand stacks: 1.4355-1.4347
Potential supply stacks: not significant

Potential long (trapped) stops: 1.4458-1.4418

Potential short (trapped) stops: 1.4762-1.4793, 1.4805-1.4820

Yesterday's month-end flows started with a push up and "Brexit" news survey results that caused the GBP sell-off. The UK Manufacturing PMI release later will give SM the fuel to whipsaw once more. SM is likely to create selling pressure to retest the current low on 1.4459 before reversing to retest 1.4600 or higher.

GU long levels: 1.4455, 1.4415-1.4400, 1.4385, 1.4340-1.4330, 1.4310, 1.4300

GU short levels: 1.4600, 1.4640, 1.4770, 1.4790, 1.4800-1.4820 

Posted at 01.06 am EST