DAILY REVIEW 22 September 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 pyscholoabout 1/3 off the gical 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 below average spread (320pips) doji closing on low vol<23months. The candle close and volume suggests no selling pressure.
WEEK- The candle is a small spread (133pips) bear closing at the low on low vol>7weeks. The candle close and volume suggests more downside.
DAY- The candle is an average spread (73 pips) bull closing just off the high on ultra high vol>43 days. The candle close and volume suggests selling absorption and possible upside.
Levels of interest: Demand: Daily/Weekly: 1.0000
Background: The possible FED rate hike continues to weigh despite extremely conflicting US data over the week. The current risk aversion climate in view of the continuing security situation in Europe is expected to continue and any rate hike, if any, is likely to be minimal. In any case, it will likely be limited to one more for the year in light of the forthcoming US Presidential Election and uncertainty for the world economy post-Brexit. With the FOMC this week, market will likely position prices against the main direction.
Oanda order book: Volumes are thin but the trapped majority positions are now the shorts with newly profitable longs.
The FOMC maintained rates and seemed intent but non-committal for the timing on another rate hike this year. The result was seen as dovish and resulted in USD weakness. Prices have pushed higher. SM is likely to test the 1.1250 level or higher before reversing.
EU long levels: 1.1120, 1.1118, 1.1108, 1.1100, 1.1045, 1.0950, 1.0938, 1.0911
EU short levels: 1.1250, 1.1290-1.1300, 1.1325, 1.1350, 1.1365-1.1371, 1.1422, 1.1452, 1.1496-1.1500, 1.1518-1.1528, 1.1592, 1.1600, 1.1615-1.1620, 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. Brexit has already seen the United Kingdom's British Pound drop significantly. The key word here is "United" because of possible secession by the pro-EU countries, if both Scotland and Northern Ireland leave there will not be much of a United Kingdom and the ramifications that such secession will birth. The British Pound as we know it would then lose significant backing economic capital (land, people, resources, etc) and thus lose its value which is not inconceivable.
MONTH- The candle is a below average spread (506pips) bear closing about 1/2 off the low on low vol<6months. The candle close and volume suggest no selling pressure.
WEEK- The candle is an above average spread (350pips) bear closing at the low on low vol>7week. The candle close and volume suggests more downside.
DAY- The candle is a near-average spread (101pips) bull spinning top closing on very high vol>3days. The candle close and volume suggests selling absorption.
Demand: Weekly/Daily: not applicable after 31 year low was broken through. Supply: Short term: 1.5574, 1.5600, 1.5619
The Oanda order book: Volumes are thin with both trapped longs and newly profitable shorts from 1.2960 - 1.3000.
Trading GU now is not for the fainthearted. I still don't suggest longs on GU because of extreme volatility and continue to look for short positions. At the moment, look for setups only at major Fib levels and structure levels. It is difficult to call the direction so I'll just watch these levels below.
GU long levels: not applicable
GU short levels: 1.3100, 1.3240, 1.3255, 1.3280, 1.3350, 1.3375, 1.3445, 1.3485-1.3495, 1.3523-1.3533, 1.3655, 1.3695, 1.3711, 1.3779, 1.3815, 1.3837, 1.3874, 1.3928, 1.3974, 1.4569, 1.4685, 1.4830, 1.4925, 1.4977, 1.5000
Posted at 3.24 am EST
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