DAILY REVIEW 23 Sep 2013

EU: Weekly is a normal spread bull closing of the high on below average vol>6weeks. Price closed above previous supply swing high of 1.3451 with next weekly supply levels at 1.3585 – 1.3600 and 1.3675 – 1.3715 The candle close, volume and position suggested more upside. The Daily candle is a small spread (50pips) narrow-body bear spinning top closing on average vol<2days which indicates no selling pressure. With the German elections completed, price opened with a 23pips gap up which has since been closed. The current trading range from 1.3497 – 1.3567 is probably the re-accumulation range for a further push up. Technicals: daily supply 1.3585- - 1.3600, 1.3675 – 1.3715, 1.3755 – 1.3795, 1.3830 – 1.3858 78.6%Fib @ 1.3504 88.6%Fib @ 1.3600 confluence day highs 5 Feb 2013 (1.3596) and 6 Feb 2013 (1.3595) minor swing (20 Aug 2013 – 6 Sep 2013) 161.8%Fib Ext @ 1.6670 After closing the gap this morning, SM is likely to maintain selling pressure to fade weak longs possibly to around the 1.3500 level then reverse upwards to test 1.3567 which is well within range. If SM requires accumulation of further orders, a probable short term pullback level if they trigger breakout orders at 1.3567 is the 1.3575 level, a monthly open that may well be defended as it will be a first return to this level since 1Feb this year. A close above this level will open 1.3600 as the next possible pullback level. The post-FOMC risk appetite sentiment remains fuelled by the German elections results and with both ECB’s Draghi and the FED’s Bullard due to speak, we can expect SM to whipsaw prices before finally heading north.

EU long levels:   1.3500, 1.3492, 1.3480, 1.3450, 1.3382  EU short levels:  1.3555, 1.3575, 1.3600, 1.3655, 1.3700, 1.3715

GU: Weekly is a normal spread (278pips) bull upthrust candle closing on average vol>8weeks. The Daily candle is a near-average spread (80pips) bear closing just off the low on below-average vol<2days which suggests no selling pressure. Price has rejected off the supply level at 1.6162 closing much of the FOMC news move.  Technicals: 88.6Fib @ 1.6203 78.6%Fib @ 1.6048 61.8%Fib @ 1.5894 Daily supply levels: 1.6170 – 1.6180 (confluence with 261.8% Fib Ext @ 1.6184), 1.6360 – 1.6380 SM is likely to fade weak shorts before reversing to around the 1.6000 level and then going back up again. Moves today will likely be influenced by the forthcoming speeches mentioned above so we can expect volatility.

GU long levels: 1.600, 1.5985, 1.5977, 1.5922  GU short levels:  1.6075, 1.6105, 1.6148, 1.6162, 1.6175, 1.6200