DAILY REVIEW 30 Aug 2013

EU: The Daily candle is an above-average spread bear closing slightly off the low on average vol>4days. Price closed above the 50% fib 1.3227 but the volume and close suggests more downside, this is also supported by the risk-averse sentiment created by the Syrian crisis and should see the safe-haven currencies of USD, JPY continue to strengthen. Having said that, we must be mindful that today is the last trading day of the month and month-end flows can whipsaw, especially on a Friday. SM is likely to create buying pressure to fade the weak longs before reversing downward. 

EU long levels:   1.3220, 1.3200, 1.3175  EU short levels:  1.3300, 1.3325, 1.3340, 1.3371, 1.3400

GU: The Daily candle is an above narrow spread (66pips) bear spinning top closing on below-average vol<2days. The candle close and volume suggests no selling interest and a probable retest of the daily ema200 at 1.5538 and higher. We may even see a higher push, perhaps to even retest the daily supply levels, as the UK will not be likely to be combative participants in the Syrian conflict. However, if a conflict begins, it will still fall as the USD strengthens which is very likely. Having held prices in a tight range yesterday, SM is likely to create buying pressure and fade the weak shorts as it retests the ema200, and reverse back down in anticipation of military action over the weekend. 

GU long levels: 1.5500, 1.5480, 1.5420 GU short levels: 1.5540, 1.5555, 1.5570, 1.5595, 1.5628, 1.5687, 1.5711

DAILY REVIEW 29 Aug 2013

The review is a bit late today as I was busy.

EU: The Daily candle is a normal spread bear closing 1/3 off the low on near-average vol<1day. Technicals: 50% fib 1.3227 confluence with trendline and 13 Aug 2013 low 1.3232 The SM has started marching to the beat of the war drums with the Syrian crisis as the safe-haven currencies of USD, JPY strengthen. We are likely seeing the full blown reversal with no further retest of the 1.3450 level unless 1.3227 holds. SM is likely to maintain selling pressure to test the 1.3227 before reversing.

EU long levels:   1.3227, 1.3200, 1.3175  EU short levels:  1.3300, 1.3340, 1.33371, 1.3400

GU: The Daily candle is a above average spread (125pips) pin bar bear closing about ¾ off the low on average vol>7days. The candle close and volume suggests SM buying as price tested the recent daily demand level  at 1.5445 – 1.5420 Note that price failed to close above the daily ema200 at 1.5538 This is significant as many traders watch a close above this level as a possible change in trend. The long tail is likely to be SM fading weak shorts instead of a reversal owing to the current sentiment. SM uses both news and sentiment to move price. Having moved downward so far today, a possible area for SM to reverse and create buying pressure to fade weak shorts before reversing back down would be around the 1.5500 – 1.5480 area.

GU long levels: 1.5500, 1.5480, 1.5420 GU short levels: 1.5555, 1.5570, 1.5595, 1.5628

DAILY REVIEW 28 Aug 2013

EU: The Daily candle is a below-average spread bull closing near the high on near-average vol>1day. Yesterday’s SM price action took out stops below Friday’s lows of 1.3332 before fading the weak longs up to nearly 1.3400 The close and volume suggests that there will be further upside with SM positioned to push prices through 1.3400 (what else but to trap pure support/resistance traders who are taught “the longer a level holds, the stronger it is”, these poor folks have never seen a tree being chopped by an axe where each blow/test weakens it) to test the 1.3450 and possibly even higher to test the 13 Feb 2013 high at 1.3519. Although price may exceed 1.3450 to take stops, if there is no follow through, we may actually have a full blown reversal as the weekly bearish divergence is in play and price may not test 1.3600 this month. The likely SM playbook is to create selling pressure during Asia to fade the weak longs but after yesterday’s price action, I would expect 1.3350 to be the likely reversal level as after clearing stops all the way to the 1.3320 level yesterday, there is no plausible reason from an order flow perspective to go below 1.3320.

EU long levels:   1.3346, 1.3320  EU short levels:  1.3415, 1.3450, 1.3500, 1.3520

GU: The Daily candle is a normal spread bear closing slightly >½ off the low on near-average vol>1day. The candle close and volume suggests some buying but based on the position of the price range, it looks more like a fade of weak shorts before further movement downward. Although price closed at 1.5544 above the daily ema200 of 1.5537, it has drifted lower. The break of the 1.5500 level has opened a possible test of the demand levels at 1.5445 – 1.5420 Price is already headed downward and SM is likely to maintain the selling pressure and fade weak shorts along the way.

GU long levels: 1.5420 GU short levels: 1.5555, 1.5570, 1.5595, 1.5628

DAILY REVIEW 27 Aug 2013

EU: The Daily candle is a bear spinning top closing on very low vol<64days which suggests no selling pressure. Perspective: we are coming to the end of August now and the previous month candle was a bull closing just off the high with average vol <6 months which suggests buying by SM from the retest of the monthly spring at 1.2750 level. Yesterday’s price action and volume suggests an unwillingness to allow price to fall and that the SM is poised to push prices to test the 1.3450 and higher to test the 13 Feb 2013 high at 1.3519. Broker platforms still show a majority of short open positions with the path of least resistance to the north with orders stacked at the usual “suspects” around 1.3450 and 1.3500. SM can easily reach and exceed these levels given the right kind of news. Price has been inside Friday’s price action so to generate interest, SM is likely to create selling pressure to induce shorts before reversing back upwards. We must bear in mind that we have a weekly bearish divergence in play and that it may top out and reverse once these levels are tested without actually going further to 1.3600 this month.

EU long levels:   1.3363, 1.3346, 1.3320  EU short levels:  1.3408, 1.3450, 1.3500, 1.3520

GU: The daily candle is a small-spread (55pips) bull pin bar closing on low volume <64days suggesting no buying interest. However, even though the reversal is likely already underway, the daily ema200 of 1.5538 sits closely below and may see some reaction. SM is likely maintain selling pressure to around the 1.5538/1.5520 level , bounce to fade weak shorts and resume then the downward move to at least to test the 1.5435 area.

GU long levels: 1.5520 GU short levels:  1.5595, 1.5628, 1.5655, 1.5690, 1.5715

DAILY REVIEW 26 Aug 2013

EU: Weekly: Bull candle is a small spread (154pips) bull closing ½ off the high on below-average volume with weekly bearish volume divergence. The Daily candle is bull spinning top closing on below-average vol<3days which suggests no demand. Technicals: weekly ema200: 1.3295 daily ema200: 1.3291 61.8%Fib: 1.3335 78.6%Fib: 1.3503 13 Feb 2013 High 1.3519 88.6%Fib: 1.3600 Daily Supply Area: 1.3577 – 1.3600, 1.3670/1.3690 – 1.3720 It looks like the bulls have absorbed the supply and are now positioned to push toward the next daily supply level of 1.3577 and higher. However, we have a weekly bearish divergence to consider now that price is still within the earlier supply level of 1.3390 – 1.3450 and the range of the weekly candle has also reduced. After inducing and then taking out all the weak longs last week, it makes no sense for SM to do a sudden drop by immediate distribution. What is more likely to happen is for SM to create buying interest upward to test the 1.3450 and take stops before reversing or even push higher to the 1.3500 key level where they last manipulated the previous day high at 1.3519 before a full blown reversal.  SM is likely to create selling pressure to fade the weak longs, then reverse to create buying pressure before the possible reversal downward.

EU long levels:   1.3363, 1.3346, 1.3320  EU short levels:  1.3400, 1.3450, 1.3500, 1.3520

GU: Weekly: Bear upthrust normal-spread (100pips) closing near low on below-average volume <3days. The daily candle is a normal-spread (99pips) bear closing 1/3 off the low on below-average volume <2days suggesting no selling pressure. However, the weekly upthrust tells us that the downward reversal is likely underway and the daily is likely to be a pause for SM to reload inventory as they top out and then move down. Technicals: daily ema200: 1.5516 38.2% Fib: 1.5420 daily demand: 1.5435 – 1.5420 Beginning from the daily bearish divergence seen last Wednesday, the downward move is likely to continue pushing to at least to test the 1.5435 area. SM actually took stops above and below the 12hour range identified last Friday and are headed south. SM will likely create buying pressure to remove weak shorts before reversing back down.

GU long levels: 1.5520 GU short levels:  1.5595, 1.5628, 1.5655, 1.5690, 1.5715

DAILY REVIEW 23 Aug 2013

EU: The Daily candle is a below average-spread (75pips) dragonfly doji closing on average vol<1day. Technicals: price has stalled at the intersection of daily resistance trendline and the support trendline. 2-Day cumulative volume shows possible SM buying from the lows on slightly increased volume. H4 does not show any climatic selling volume yet. Broker platforms still show a traders majority in short positions. The bearish volume divergence prior to FOMC has played out and whether it continues or not is the issue. All the FOMC movement is news-based on expectation of the FED tapering bond purchases. However, the US economy is not in great enough shape to really taper so there is still the possibility of price holding and going back up which is what price action and volume suggest at the moment. This, coupled with the fact that we see “support” at the intersection of daily resistance and support trendlines lend weight to the possibility of a further upward move. From a order flow perspective, it would likely be that the bulk of orders now actually sits above and not below. SM is likely to create selling pressure to fade the weak longs, then reverse to create buying pressure at least the 1.3400 level.

EU long levels:   1.3305  EU short levels:  1.3372, 1.3400, 1.3450

GU: The daily candle is a normal-spread (100pips) bear closing on average volume <1day, not unexpected since we had daily bearish volume divergence before FOMC. Price rejected from a possible reversal level and we have the last H4 swing showing us the highest cumulative sell vol since the previous swing from about 1.5568 to 1.5520. With a total drop of about 151pips from the swing high, if there is intention to retest the highs, the current H4 demand level 1.5520 – 1.5485 must hold. Note that there is no climatic buying volume yet in H4 so it may not yet be the end of the upmove. What is critical now is how price reacts at 1.5561 and 1.5612, a clear hourly close above or below these levels should provide the day’s direction bias. Broker platforms still show majority traders are short. SM will likely remove weak longs and shorts between this 12 hour range before breaking through and we will need to see how the volume builds. SM has yet to remove weak shorts so I will look for them to spike the Asia low or 1.5561 to remove weak longs and reverse up to remove weak shorts, if the volume builds strongly past 1.5612, they may just be going back up to test the supply again.

GU long levels: 1.5562, 1.5555, 1.5520  GU short levels:  1.5620, 1.5655, 1.5694, 1.5727, 1.5750

My apologies I am not well today. 

DAILY REVIEW 21 Aug 2013

EU: The Daily candle is a wide-spread (129pips) bull closing about 1/4 off the high on above-average vol>2days. Technicals: Supply levels: 1.3449 – 1.3520 (was from retest of breakout level, 2^nd retest, confluence with Fib Extension 161.8%@1.3519),  1.3575 – 1.3600, 1.3670/1.3695 – 1.3710 (confluence with Fib Extension 261.8%@1.3714). Price has reached past 1.3450 and within range of the supply at 1.3480 – 1.3520 as well heading into the FOMC but with news being what it is, we have the possibility of the higher supply coming into play as well. The Broker platforms show a further increase in short positions. We are close enough to the supply levels where there potentially huge orders stacked and would be a potential full reversal level bearing in mind that any statement from the FOMC stating the reduction of QE is going to move prices and there may be contradictions and clarifications causing whipsaw, setups at/close to the levels will give the potentially best and safest trades. The daily close is now with bearish volume divergence close to the supply level so SM is likely create buying pressure to fade the weak shorts, then create selling pressure to remove weak longs/induce sellers and then reverse back to test at least the first level of supply.

EU long levels:   1.3400, 1.3375, 1.3353  EU short levels:  1.3450, 1.3485, 1.3515, 1.3575, 1.3600, 1.3695, 1.3710

GU: The daily candle is a small-spread (67pips) bull spinning top closing on below-average volume >1day (no demand) with continued daily bearish volume divergence for 3days. Technicals: supply levels 1.5721/1.5733 – 1.5750 (confluence Hourly Fib Extension 161.8% @1.5721), 1.5780 - 1.5806 (confluence daily Fib Extension 161.8% @ 1.5818), 1.5843 – 1.5877 (daily ema800 @ 1.5890) Broker platforms indicate that there is a further increase of traders going short. Note that the daily candles are getting smaller and smaller in spread and yesterday’s candle is small spread on slightly higher volume. This is a definite sign of a “topping formation” forming. However, price has not retested the supply at 1.5750 yet and presents a good way for SM to induce shorts before going long to test. SM will likely remove weak longs probably by spiking Asia high before reversing to create selling pressure to reload inventory before pushing up again. We do have some UK news and US news prior to FOMC so SM will have fuel enough to position the prices.

GU long levels: 1.5620, 1.5600, 1.5580, 1.5555  GU short levels:  1.5694, 1.5727, 1.5750, 1.5780, 1.5815, 1.5850, 1.5885

DAILY REVIEW 20 Aug 2013

EU: The Daily candle is a below average-spread (59pips) pin-bar doji closing about 2/3 off the high on below-average vol<2day which suggests “no demand”. The candle close and volume suggests more downside but note that the candle is also an “inside day” of last Friday’s range which means that price failed to make either a new high or new low, this when combined with Thursday’s price action will suggest that SM will likely be heading for orders at or above the supply levels. The supply levels in play will be the 1.3380 – 1.3430 and maybe the 1.3480 – 1.3520 as well. Broker platforms show an increase in short positions. SM is likely to create buying pressure to remove weak shorts and then reverse back upward.

EU long levels:   1.3315, 1.3300, 1.3281, 1.3260 EU short levels:  1.3400, 1.3450, 1.3515

GU: The daily candle is a small-spread (64pips) bull closing 1/3 below the high on below-average volume <4days (no demand) with continued daily bearish volume divergence. Broker platforms indicate that there is an increase of traders short. Price has still not quite reached the daily supply levels yet so SM will likely test Asia high to fade the weak shorts before reversing to create selling pressure to reload inventory before pushing up again.

GU long levels:  1.5600, 1.5580, 1.5555, 1.5540, 1.5520  GU short levels:  1.5675, 1.5727, 1.5750

DAILY REVIEW 19 Aug 2013

EU: Weekly candle is a bullish dragon-fly (174pips) with the long tail pointed below closing on low vol >1week. Price did not make a new high and the close 1.3327 was lower than the previous week’s close of 1.3339 but still above the weekly ema200 of 1.3294. The Daily candle is a below average-spread (69pips) bear closing off the low on below-average vol<1day. Technical levels: 88.6% Fib 1.3339, last week high 1.3379, previous week high 1.3339, weekly ema200 1.3294, daily supply zones 1.3390 – 1.3450, 1.3478 – 1.3526 The daily candle close and volume suggests that there is buying activity by SM. Broker platforms still show most traders are short. After last Thursday’s and Friday’s price action, we can see that after sweeping the board, SM will likely test the supply levels. The market opened with a small gap up and SM is keeping price in a tight range during Asia. SM is likely to create selling pressure to give the impression of an imminent drop before reversing to test the supply zone at 1.3400 and possibly higher.

EU long levels:   1.3300, 1.3281, 1.3260, 1.3245, 1.3225 EU short levels:  1.3400, 1.3450, 1.3515

GU: The weekly candle is a near-normal spread (235pips) bull closing near the high on below-average volume >1week. Weekly levels to watch: Supply levels 1.5725 – 1.5750, breakout 1.5800 – 1.5850 The daily candle is a bear spinning top of small-spread (50pips) closing on below-average volume <1day with continued daily bearish volume divergence. Although the weekly candle close and volume suggests more upside, the daily bearish volume divergence suggests SM will create selling pressure to reload inventory before pushing up again.

GU long levels:  1.5600, 1.5580, 1.5555, 1.5540, 1.5520  GU short levels:  1.5675, 1.5727, 1.5750

DAILY REVIEW 16 Aug 2013

EU: Daily candle is a large-spread (157pips) bull closing near the high on above-average vol>8days. The volume and the close suggests more upside. However, we note that today is Friday and mid-month. SM has taken out 3 days of price action by removing weak longs and shorts. I was listening to news and the news reader said that there was no known reason for the push up except that trading volume was very thin. We have to realize that many traders that got wiped out of their positions would not be in a hurry to get back in.  SM is keeping price in a tight range during Asia so far. SM is likely to create selling pressure to remove weak longs before reversing to test the supply zone at 1.3400, the move would probably be a deeper one, given that there were few market participants in the markup and a lot of traders will be thinking short. Again, broker platforms show short positions increased.

EU long levels:   1.3315, 1.3300, 1.3281, 1.3260, 1.3245, 1.3220 EU short levels:  1.3400, 1.3450, 1.3510

GU: The daily candle is a bull candle of wide-spread (155pips) closing slightly off the high on high volume >5days There is daily bearish volume divergence. Just like the EU, SM marked up prices yesterday “with no basis”. SM will likely create selling pressure to remove weak longs from the market before reversing back upwards. I believe the retracement can be deep given that there is a daily volume divergence yesterday which simply says that SM used less volume to move prices up to those levels. However, given that even though the volume has diverged, it is still high. That suggests that SM will be reloading to push up again. We have seen this many times this week as most surges were news-based. There is some US news today that may help the upward movement later but it may also keep falling for SM to take profits.

Having said that, the supply level 1.5720 – 1.5750 is now well within striking distance.

GU long levels:  1.5600, 1.5580, 1.5555, 1.5540, 1.5520  GU short levels:  1.5675, 1.5727, 1.5750

DAILY REVIEW 15 Aug 2013

EU: Daily candle is a small-spread (41pips) bear narrow-body spinning top closing on below-average vol<1day. The volume and the close suggests no selling pressure. As I write, SM has opened up the Asia range by creating buying pressure. Although longs have increased, the market remains a short bias on open orders. H6 candle close and vol suggests SM fading to remove weak shorts. With the previous week’s low already tested, SM has taken out weak longs after 4 days of bear candles. Logic implies that there would be no reason for SM to go back down all the way to retest the low at 1.3232 since orders there have already been taken by them. The probable SM play today would be to create buying pressure to remove weak longs, reverse to pick up new shorts (many herd traders are short) especially from the 1.3310 level identified yesterday and create selling pressure before reversing upwards to retest 1.3322, 1.3345 and even 1.3400 as all are well within reach. We have a slew of news from the UK and the US today so SM will have all the fuel they need. It is not illogical to short at the identified higher levels if we have a valid setup but my guess is that with the “do we”/”don’t we” on QE reduction from the FED, SM will move higher to stop out the majority of the current shorts, perhaps up to 1.3450 – 1.3500

EU long levels:   1.3260, 1.3245, 1.3232 EU short levels:  1.3320, 1.3350, 1.3400, 1.3450, 1.3510

GU: The daily candle is a bull candle of normal-spread (124pips) closing 1/3 off the high on average volume >1day Yesterday I wrote “SM has literally cleared a route for a quick markup if required” – and they did with the good UK news. Price action yesterday has taken both weak shorts and weak longs out of the market. Price is still quite far from the supply level so now that SM has created a huge pin to the upside on H1 in Asia, I believe that SM will maintain the selling pressure to remove the weak longs, especially those who jumped in on the retracement to the 1.5500 key level to at least take them out before reversing upwards.

GU long levels:  1.5482, 1.5462, 1.5445, 1.5430  GU short levels:  1.5545, 1.5575, 1.5600, 1.5650, 1.5675

DAILY REVIEW 14 Aug 2013

EU: Daily candle is a near-normal spread (84pips) bear wide-body spinning top closing on below-average vol>3 days. The increased volume and the close suggests buying and the low yesterday tested last week’s low of 1.3232. Context: Weekly no demand. The headline news was not good and but the adjusted MOM figures were “largest gain” since Dec 2012. SM quite obviously used the US news yesterday to take out even more weak longs after long positions actually increased. SM would likely be expecting the herd to jump in on shorts so a stop run of yesterday’s lows may be a possible reversal point but it depends on how the news unfolds as well. SM is likely to create buying pressure to fade the weak shorts before reversing down to test the low.

EU long levels:   1.3232, 1.3210, 1.3200, 1.3182 EU short levels:  1.3305, 1.3320, 1.3350

GU: The daily candle is a bear upthrust candle of near normal-spread (85pips) closing on near average volume >2days Note that price went below the breakout level of 1.5433 to trip stops before closing at 1.5445. The price action also included a 80pips spike during the NY session to 1.5510 and bounced off the ema200 at 1.5508. Although the daily candle is an upthrust and the volume seems to indicate selling, SM has literally cleared a route for a quick markup if required. With the forthcoming UK news today, it does create possibilities. Price is also close enough to the 1.5400 for SM to take stops below it. SM will likely create selling pressure perhaps to take stops below the 1.5400 key level before reversing upwards. Alternatively, if the news is not UK positive, we may well see further drop. Just because SM has taken out the weak shorts with the spike up does not mean that they intend to move up, it may well be that they want to minimize the number of herd on the downward move. After all, they have these peoples’ orders already.

GU long levels:  1.5426, 1.5400, 1.5385  GU short levels:  1.5500, 1.5535, 1.5575, 1.5600, 1.5650, 1.5670

DAILY REVIEW 13 Aug 2013

EU: Daily candle is a small-spread (66pips) bear spinning top closing on below-average vol>1 day. The volume indicates no selling pressure and the close suggests buying. Broker open positions today still reveal a net short position but ratio of long positions have increased significantly. In moving down to 1.3277, SM has taken stops below last Thursday’s low and now look to be going back into the upward technical trend. Price is well back above the key 1.3300 level and after fading the weak longs for 2 days, possible SM move today will be to retest yesterday’s high or higher. Note that as longs start to pile in, the road less travelled upwards becomes so much smoother for SM to mark up. SM can be expected to maintain the buying pressure to test 1.3350 (Fri NY low) especially as there is enough news events for SM to propel prices as they may require.

EU long levels:   1.3300, 1.3272 EU short levels:  1.3350, 1.3400, 1.3430

GU: The daily candle is a below average-spread (63pips) bear closing at the low on low volume <54days The volume indicates no selling pressure whereas the close indicates a lower price. Both continue to play out as price has pushed lower and is now reversing upwards. SM will likely maintain the buying pressure to test the breakout (gap) level at 1.5495 and the daily ema200 at 1.5508. An hourly close above the ema200 will likely see GU resume its upward trajectory.

GU long levels:  1.5447  GU short levels: 1.5500, 1.5535, 1.5575, 1.5600, 1.5650, 1.5670

DAILY REVIEW 12 Aug 2013
EU: Weekly candle narrow-spread bull spinning top closing on vol<31weeks, although at weekly supply level, price did not make a new high. The volume and close suggest that there is no demand for price to push higher. Daily candle is a small-spread (58pips) bear closing on vol<53 days and price closed at 1.3340 being the daily 88.6% fib. The volume indicates no selling pressure but the close suggests that price may push lower.  CFTC reports that at the close on 6th August 2013, a net long Euro position was seen for the first time since late June which suggest that some bigger players are now net long.  Broker open positions today reveal a net short position but slightly reduced from last week.  After five straight weeks of rise, a retracement down is in order and the volume suggests so. However, the orders sitting above 1.3400 remain tempting for SM to pass up and the way up is still less congested than down so SM is likely to position prices in anticipation of US news from this Tuesday to Thursday. Market gapped down on the open today as SM removed weak longs from Thursday continuing the bearish volume divergence seen on Friday. SM can be expected to maintain the selling pressure to continue to clear out weak longs before moving back up to test  the 1.3350 (Fri NY low).
EU long levels:   1.3300, 1.3272, 1.3245 EU short levels:  1.3350, 1.3400, 1.3430


GU: Weekly candle is a normal-spread bull closing about ¼ off the high on vol<1week. The daily candle is a below average-spread (62pips) bear closing at the low on low volume <53days bouncing off the 78.6 Fib (1.5549) closing as an inside day to Thursday’s candle. The daily candle close suggests more downside but the volume suggests no selling pressure. Prices gapped down on open to 1.5485 (a possible long level listed last Fri) as SM moved down to flush out weak longs and the selling pressure is likely to continue to the 1.5447 before reversing back up. 
GU long levels:  1.5480, 1.5447  GU short levels: 1.5535, 1.5575, 1.5600, 1.5650, 1.5670

DAILY REVIEW 9 Aug 2013

EU: Daily candle is a below average-spread (72pips) bull closing on vol<1 day with the second day of continued bearish volume divergence is now in the daily supply area at 1.3390 – 1.3400 Broker platforms show that EU shorts open positions increased to nearly 80%. However, the candle spread, candle close and volume suggests that there is reduced buying and we may see a reversal soon. The bearish volume divergence may also play out and reverse from here. However we must be mindful that the current supply level was a successful retest of the 1.3450 area and watch out for spikes before the potential drop. The 1.3400 level is also where several ECB members commented that the Euro was “too high” and EU dropped like a rock. The likelihood is that the orders sitting above 1.3400 will be too tempting for SM to pass up.

 The SM will be likely to create selling pressure to restock inventory before reversing to test 1.3400 – 1.3415 and let’s see what happens from there. If price stopruns the level, there is a potentially nice ride down. If it does not, just wait to see what happens toward 1.3450.

EU long levels:  1.3348, 1.3300, 1.3272 EU short levels:  1.3400, 1.3430, 1.3450

GU: The daily candle is a normal-spread (89pips) bull closing 1/3 off the high on below-average volume <1day with bearish volume divergence. Note that net short positions in GU have also increased. The daily volume and candle close suggest a possible retracement after the inefficient news-based move and no-basis move yesterday. Whilst there are orders sitting above, there are also lots of orders strewn along the path up by traders jumping in long on the push up. These would be easy picking for them and SM will likely take these and create selling pressure to about 1.5500 level to remove weak longs before reversing upwards. I don’t expect it to fall much lower because we are far from the daily supply levels but if EU falls very hard and reverses from the current levels, GU may just follow to test ema200 at 1.5461

GU long levels:  1.5500, 1.5485, 1.5461  GU short levels: 1.5575, 1.5600, 1.5650, 1.5670

DAILY REVIEW 8 Aug 2013

EU: Daily candle is a below average-spread (79pips) bull hammer closing on vol>2 days with bearish volume divergence. Price finally breached the previous spike high of 1.3344 (31 Jul 2013) and is now within reach of the daily supply at 1.3390 – 1.3400 Technicals: 88.6% Fib at 1.3337  Broker platforms show that EU shorts open positions increased to about 75% which would suggest that most speculators expect it to dive from here. However, the candle close and volume suggests that there is more upside but the H4 candles suggest that there will be a retracement soon. The 88.6% Fib plus the bearish daily volume divergence suggests that the SM will be likely to create buying pressure, spike the highs or a bit more, reverse and maintain the selling pressure to push back downwards and fade the weak longs before going back up.

EU long levels:  1.3300, 1.3272 EU short levels:  1.3355, 1.3402, 1.3430

GU: The daily candle is a wide-spread (326pips) bull closing off the high on above-average volume >14days. Technicals: 78.6% Fib at 1.5545, ema200 at 1.5460 Price reached the intermediate supply level of 1.5500 - 1.5530 and with price holding, looks like supply is being absorbed. Net short positions in GU have also increased. The daily volume and candle close does suggest more upside but I will expect some retracement after such an inefficient news-based move.  A possible SM move is to create buying pressure perhaps to about 1.5520 level or even spike the 1.5530 high before pushing downwards to remove weak longs before reversing upwards back into the technical trend.

GU long levels:  1.5400, 1.5382, 1.5320, 1.5270  GU short levels: 1.5518, 1.5530, 1.5575, 1.5600

DAILY REVIEW 7 Aug 2013

EU: Daily below average-spread (77pips) bull closing on vol<1 day. The candle close and volume suggests that there is more upside. The daily candles look somewhat like they are basing to go higher. Perspective: July's monthly candle is a normal-spread bull closing just off the high on vol<5weeks (this was after a successful retest of the spring at 1.2723). H4 candles currently at time of writing show no demand and price falling. SM will be likely maintain the selling pressure to remove weak longs then reverse upwards.

 EU long levels:  1.3280, 1.3261, 1.3245 EU short levels:  1.3321, 1.3342

GU: Daily candle is a small-spread (61pips) bear “evening star” closing on lower than average volume <4days. This shows no buying pressure and price is likely to move lower before reversing. SM has already created selling pressure to fade the weak longs. However, they may also reverse upwards taking in longs to stoprun the Asia high or 1.5380 level before pushing further downwards.

GU long levels:  1.5300, 1.5268 GU short levels: 1.5480, 1.5500, 1.5525

DAILY REVIEW 6 Aug 2013

EU: Daily narrow-spread (68pips) bear spinning top closing on average vol<4 days. The candle close and volume suggests no selling pressure. It is interesting that after failing to break 1.3300, prices never really dived and most broker open positions show an increased net short position. If the intention is to go back up as what the “no selling pressure” suggests, SM will be likely to create selling pressure to remove weak longs and test the 1.3200 key level and maybe even up to the 1.3182 level, then reverse upwards.

EU long levels:  1.3200, 1.3185, 1.3165 EU short levels:  1.3300, 1.3321, 1.3342

GU: Daily candle is a normal-spread (120pips) bull closing off the high on lower than average volume <3days. The close(at the technical daily trendline) does suggest more upside and the volume suggests SM is behind the move. Price is close enough to test the daily supply level at 1.5410 – 1.5433 and the likelihood is that it will. Broker short positions have increased as traders have aggressively shorted the rise. SM would likely create selling pressure to fade the weak longs before reversing but I don’t expect it to go too low as they will not want to give too much away to traders already short.

GU long levels:  1.5300, 1.52985, 1.5200, 1.5150 GU short levels: 1.5480, 1.5500, 1.5525

DAILY REVIEW 5 Aug 2013

EU: Weekly candle is a narrow-spread (163pips) slightly bearish almost doji (close is 3pips below the open) closing way off the lows on below average vol>2weeks. Technicals: Weekly ema200 is at 1.3293 and daily trendline resistance at 1.3312. Daily normal-spread (112pips) bull closing just off the high on average vol<2 days. The candle close and volume suggests more upside but it is on a “no demand” volume and note that price also failed to breach Thursday’s open of 1.3300. However, Friday’s volume is still relatively high when we look at the volume profile. It is worth noting that net short positions on EU have increased and SM would only be happy to fade these weak shorts presumably around or below the 1.3344 spike. A probable SM move will be to create buying pressure and spike Fri high or maybe the 1.3300 key level, then reverse downwards to fade the weak longs, perhaps until around the 1.3200 level before reversing back up.  

EU long levels:  1.3230, 1.3200, 1.3189, 1.3165 EU short levels:  1.3300, 1.3321, 1.3342

GU: Weekly is a normal spread (311pips) bearish hammer on vol>1week. Daily candle is a wide-spread (207pips) bull closing near the high on average volume <1day. The close and volume suggests more upside perhaps to  test the daily supply level at 1.5410 – 1.5433. Technicals: Daily trendline resistance at 1.5352 confluence with 1.53527 (30 Jul 2013 high). Broker short positions have increased slightly. SM would likely create selling pressure to fade the weak longs before reversing.

GU long levels:  1.5241, 1.5224, 1.5200, 1.5150 GU short levels: 1.5350

DAILY REVIEW  2 Aug 2013

EU: Daily normal-spread (117pips) bear closing just off the low on average vol<1 day. The candle close and volume suggests more downside. As I write, H4 does show bullish volume divergence as price presses the 1.2190 level. SM has taken the opportunity to push prices lower on the back of better than expected US data. Yesterday’s background is interesting because both GU and EU fell because of USD strength telling us that there is demand for both Gbp and Eur. SM is likely to fade the weak shorts from the 1.3200 level upwards before moving it back down. The market is still net short but with a smaller percentage week-to-date. With NFP today, there is a likelihood of price in a staying in a tight range possibly within 1.3232 and perhaps up to 1.3250 as it gives SM flexibility to react to the news later. If NFP data misses or simply meets estimates, we may see EU push back upward as usually much of the expectation is already priced-in prior to the release. If SM holds price above 1.2190 all the way to the news, the probability of a long is higher.  

EU long levels:  1.3192, 1.3165 EU short levels:  1.3230, 1.3250, 1.3300, 1.3342

GU: Daily candle is a wide-spread (133pips) bear closing near the low on increased average volume that Wed and also >11days. The close and volume suggests more downside towards the daily demand level  1.5075 – 1.5025. Traders are still net long and SM will continue to fade these guys. SM will likely create buying pressure before pushing back down again. With NFP coming up, it will also likely be a narrow range. Although my expectation is still for GU to push lower and reverse at the daily demand area, if price tests and closes below 1.5025 on H1, it will be likely to continue down.  

GU long levels:  1.5120, 1.5080, 1.5025 GU short levels: 1.5158, 1.5180

DAILY REVIEW 1 Aug 2013

EU: Daily wide-spread (134pips) bull spinning top on above average vol>13 days with daily bearish volume divergence. Significantly, price closed at 1.33005 and although price kissed the 81.6%fib and dropped from there, this does not look anything like a reversal yet. Considering that SM did vacuum cleaning over 134 pips taking out weak shorts and weak longs. First, if they only wanted to spike up to move down, they need not have taken out more than 2 days of price range. Secondly, price has not reached the daily supply area 1.3390 – 1.3400 yet. SM will continue the selling pressure through Asia before reversing back up and this time we may see the push to the daily supply levels pre-NFP which is next on the queue. 

EU long levels:  1.3270, 1.3252, 1.3240  EU short levels: 1.3342, 1.3390, 1.3400, 1.3420

GU: Daily candle is a wide-spread (132pips) bear pin closing 2/3 off the low on average vol>13day. Price bounced up at the start of the daily demand level  1.5120 and the close suggests buying and a slowing down of the downward momentum. It also suggests that the daily demand level  1.5075 – 1.5025 is a high probably reversal area so I will still be looking to sell at the highs and buying when I get a set up at the demand area.  However, if price stalls and cannot break yesterday’s low, I will look for a long on the stoprun of that level as well. I will only be interested in shorts with a setup from the higher levels above.  

GU long levels:  1.5120, 1.5080, 1.5025 GU short levels: 1.5280, 1.5300, 1.5319