DAILY REVIEW 19 September 2016

Hi friends,

My apologies for not posting last Friday as I was knocked out by severe food poisoning. Wishing everyone good trading this week.

Regards
Trek Trader

  
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 above average spread (100pips) bear closing near the low on average vol<1day. The candle close and volume suggests more downside.

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 with no clear trapped majority positions.    

Prices tanked on Friday but still relatively weak for a collapse and retracement is very minute so far. SM is likely to induce more shorts to test the 1.1140 level or lower before reversing to take out weak shorts.

EU long levels: 1.1140, 1.1120, 1.1118, 1.1108, 1.1100, 1.1045, 1.0950, 1.0938, 1.0911

EU short levels:  1.1220, 1.1235, 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 very large spread (250pips) bear closing on average vol<4days. The candle close and volume suggests more downside.

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 longs.

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: 1.3200, 1.3220, 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 4.52 am EST