DAILY REVIEW 31 Jul 2013
EU: Daily narrow-spread (68pips) bear doji (0.3pips difference between open/close) on low vol>1 day with daily bearish volume divergence. It is déjà-vu as price closed at 1.3261 (same as Monday’s close) just above the daily ema200  1.3249. So we saw a daily up and down sweep by SM trapping traders on both sides in the range. Although there is continued bearish volume divergence, price has held in a range and in creating a daily doji after a fall from a key level will only induce more shorts, perfect for SM stocking inventory prior to going long as Net shorts in EU continue to increase. We have the FOMC statement tomorrow which will probably be the catalyst. SM will likely push prices down to garner more orders prior to the move up pre-FOMC, especially if the intent is to push through 1.3000 to the 1.3390 – 1.3400 daily supply area. We need also to be mindful that there is possible technical trend line “resistance” at 1.3325 and 88.6%fib at 1.3338 Having said that, prior to FOMC, I will also be open to short at the 1.300 key level if I have a setup to ride down.
EU long levels: 1.3240, 1.3225, 1.3210  EU short levels: 1.3300, 1.3330, 1.3390, 1.3400, 1.3420 

GU: Daily candle is a wide-spread (131pips) bear closing just off the low on below-average vol>1day which suggests a continued SM mark-down move. We also note that Net long positions have increased. The candle close suggests more mark-down before going back up. As this is a mark-down move by SM, it is likely for a retrace to take out weak shorts before continuing the move down. As I write this, there is H4 bullish volume divergence but price is close enough to the key level 1.5200 and the previous breakout level of 1.5180 and may stall to retrace at around these levels so I will look to take a long for a retracement trade if possible and look to short from 1.5280, 1.5300, 1.5319 but not any lower. 
GU long levels:  1.5220, 1.5200, 1.5180, 1.5150, 1.5120 GU short levels: 1.5280, 1.5300, 1.5319