DAILY REVIEW  22 Jul 2013

EU weekly: narrow-spread bull hammer-like candle closing just off the high on vol <8weeks. Daily narrow-spread bull spinning top closing off the high on vol <37days.  On it’s own it would seem to indicate no buying interest  but the context that I see this is that it happened late last Fri as a preparation to push up further and confirmed my expectation that I discussed in last Friday’s review.  When I woke up, the Asian range had already broken Friday’s high. The high of 1.3205 created by the latest FOMC news has not been retested yet and looks like a retest is due and also the possibility of 1.3250 being reached today.  A close above 1.3205 today will expose the daily 1.3390 – 1.3400 supply area. SM will likely create buying pressure and then reverse to fade weak longs before moving up again. The weak longs trap move has high probability around the previous rejection level of 1.3175. I will be looking for long trades.

EU long levels: 1.3130, 1.3123  EU short levels: 1.3175, 1.3205

GU weekly normal-spread  bull closing just off the high on below average vol. Daily near-normal spread (86pips) bull closed off the high on vol <12days. Asia price action has broken Friday’s high of 1.5281. A close above 1.5300 will likely see a test of the ema200 around 1.5480 – 1.5500. The close and relative low vol on the weekly suggests SM buying and mark up. As Smart Money has been creating buying pressure in Asia so far, a possible move would be to take stops at or around the 1.5300 key level  and reverse to fade the weak longs, create sell pressure before going back up.

GU long levels:  1.5263, 1.5242, 1.5225 GU short levels: 1.5305, 1.5320

Note: Although fundamentals do not support any Euro strength, I will trade what I see develop on the volume. It takes volume to move prices either up or down and I have learnt to trade what I read and see and not what the SM wants me to believe. Even when wrong, trading at the manipulation or supply/demand levels reduces our risk and maximizes our profit and trading is all about risk to reward whatever system we use.