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