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, 2nd 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
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