DAILY REVIEW  23 Jul 2013

EU: The daily candle is a below normal-spread (82pips)  bull closing 2/3 off the high on vol <38days with clear bearish vol divergence.  This potentially indicates no demand. Price closed above the previous 6 days but failed to close above the FOMC spike high 1.3205, this will likely give the impression that a reversal south is due soon. Price is nowhere near the daily 1.3390 – 1.3400 supply area. SM will likely test or break the 1.3217 to create buying pressure then reverse to create selling pressure to fade the weak longs before moving up again. The weak longs trap move has high probability around the previous rejection level of 1.3217. If they break this level, a probable reversal level will be 1.3235-1.3253 being the previous H4 retest of breakout. My bias is long but I will take the short if I get a setup at the levels mentioned.

EU long levels: 1.3160, 1.3149  EU short levels: 1.3217, 1.3250

GU: Daily wide-spread (126pips) bull closed just off the high on vol <13days with bearish volume divergence. A possible move for the SM would be to take stops at or around the 1.5383 or even 1.5400 key level and reverse to fade the weak longs by creating selling pressure before going back up. If they break this level, the next possible trap level is around 1.5428 however, with many stops just above 1.5400, this may be the level from which to create the selling pressure.

GU long levels:  1.5320, 1.5300, 1.5272 GU short levels: 1.5383, 1.5400, 1.5428

Note: Although there is bearish volume divergence on the daily, it needs to be at a significant level of supply/demand and we need to see it confirmed in the smaller time frames to take the trade.