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