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