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