DAILY REVIEW  29 Jul 2013

EU: Weekly bull candle closing near high on vol<9 weeks Daily narrow-spread (45 pips) doji candle on low vol<3 days with bearish volume divergence. Price closed just below the weekly ema 200  (1.3293). With the daily 1.3390 – 1.3400 supply area within reach, there is possible technical trend line resistance at 1.333 and 88.6%fib at 1.3338. The previous accumulated 2days volume is increased, slightly above average and with the candle close just off the highs which suggests more upside. Last Friday saw prices hold within a tight range with SM unwilling to allow prices to fall below 1.3251. Net short EU positions have increased. This will likely see SM fade the shorts, push up and test the daily supply levels. We may see SM create buying pressure, reverse into selling pressure to pick up shorts, maybe with a stop run of the 1.3300 key level or the technical trend line 1.3333 and then reversing back upwards after a stop run to the lows around 1.3270.

EU long levels: 1.3267, 1.3255  EU short levels: 1.3300, 1.3330, 1.3390, 1.3400, 1.3420

GU: Weekly is a bull candle closing 1/3 off the high on vol<9 weeks. Daily candle is a narrow-spread bear (80 pips) small-bodied bear spinning top closing low vol<3 days which suggests no selling pressure.  Last week’s price action saw price test, breakthrough and then close just below the 61.8 Fib (1.5390) at 1.5376 suggesting that supply at this Fib level has been absorbed and price can now make it’s way up to the daily ema200 at 1.5477 – 1.5530 SM is likely to create buying pressure before reversing to fade the weak longs, pick up orders at the lows and then reverse back up. Without clear strong supply levels within reach, it would make sense for SM to stay within 1.5433, inducing more shorts as traders see the long h1 pin bar to the left by a stop run to 1.5422, reverse down to take stops below Asia low and then move back into the long technical trend continuation.

GU long levels:  1.5375, 1.5355 GU short levels: 1.5422, 1.5433, 1.5485, 1.5500, 1.5525