DAILY REVIEW 2 Sep 2013

EU: Monthly candle is a small-spread (279pips) bear upthrust closing on vol<7months. Apart from price being rejected off the technical monthly down-trend line at about 1.3350 price did not reach any significant level and the volume suggests no selling pressure. However, the close does suggest some downside. Weekly candle is a small-spread (226pips)bear closing 48pips off the lows on very low vol<34weeks. Price has actually taken out the supply level swing high at 1.3415 before retracing. The volume suggests no selling pressure but the close does suggest at least a test of last week’s low. Technicals:  trendline resistance at 1.3285 confluence with 23.6% Fib@1.3289, 50% Fib@1.3101 daily ema200@1.3058 The Daily candle is a below-average spread (82pips) bear closing 2/3 off the low on average vol<3days with daily bullish volume divergence. The volume suggests no selling pressure and the close does suggest SM fading of weak short positions. The risk-averse sentiment created by the Syrian crisis is still in play so although a retest of at least the trendline resistance is likely, news may give SM the fuel to take more stops below last week’s low. A close below last week’s low of 1.3172 would likely see a test of the 1.3100 level and maybe also the 1.3061 demand/breakout level. However, price stalling at the lows with bullish volume divergence in H1/H4 with a setup may provide a long trade especially if during NY. Price opened with a 11 pips gap down and has remained in a tight range. SM is likely to create selling pressure to fade the weak longs before reversing upwards.

EU long levels:   1.3175, 1.3150, 1.3100. 1.3061  EU short levels:  1.3300, 1.3325, 1.3340, 1.3371, 1.3400

GU: The monthly candle is a below-average spread (614pips) bull candle closing 1/3 off the high on vol<5months. Price is neither near monthly supply nor demand levels. The weekly candle is a small-spread (184pips) bear spinning top closing on vol<15weeks after a test of the weekly supply level. Technicals: daily ema200@1.5487 38.2% Fib@1.5420 daily supply levels: 1.5720 – 1.5750 The Daily candle is below-average spread (66pips) bear spinning top closing on below-average vol<3days. The candle close and volume suggests no selling interest after the test of the 1.5420 level and a probable push back upwards. Price opened with a 39pip gap up, the gap through the trading range on the left is usually for SM to mark price quickly and cheaply so that traders trapped long will hold their positions and not keep covering to get out, which makes it pricey for SM to keep going. The likely SM move will be to create selling pressure to fade the weak longs and then reverse.

GU long levels: 1.5516, 1.5500, 1.5480, 1.5420 GU short levels: 1.5628, 1.5687, 1.5711, 1.5720, 1.5750