DAILY REVIEW 27 Sep 2013

EU: The Daily candle is a small spread (59pips) bull closing off the low on low vol>1days. Broker platforms continue short positions still dominant but one broker states that “The trading crowd has grown less net-short from yesterday and last week”. The candle close and volume suggests SM buying into the candle. As I write, the Asian range so far is 1.3473 – 1.3490 SM has created selling pressure early in Asia to test yesterday’s lows and as I write, is now reversing to test Asia high. The retracement low 1.3461 (25 Sep) on the current daily swing is also the 23.6% Fib and together with the current high 1.3567 form the Trading Range (TR) clearly seen on a H4 chart. A H1 break and close below this level will likely see prices push lower in which case I will look to short on the retest of the breakout. Conversely, a H1 break and close above the 1.3567 will also likely result in price going upward to the next supply level. The likely SM move will be to create buying pressure to fade weak short and induce longs, then reverse downward to remove weak longs, then reverse again upward in a push to test 1.3555 and higher. SM is likely to maintain the buying pressure to test  1.3500 - 1.3520  and may or may not reverse back to Asia low depending on how H1 closes as a guide. If the level is a clear stop hunt, it may mean a break lower to the 38.2%Fib at 1.3335. The Asia range is not updated after the UK news mentioned below.

EU long levels:   1.3470, 1.3460, 1.3382, 1.3348, 1.3330  EU short levels:  1.3500, 1.3520, 1.3555, 1.3575, 1.3600, 1.3655, 1.3700, 1.3715

GU: The Daily candle is a normal spread (97pips) bear closing about ½ off the low on below-average vol>1day. The candle close and volume suggests that SM bought into the candle. Broker platforms continue to show that traders are still net-short and one even notes that “The trading crowd is further short since last week”. As I was writing, UK’s George Carney was quoted by the Yorkshire Post that he “sees no need for further QE” and GU Asia range is now about 100pipsn and price has already embraced the 1.6100 level. SM will test supply at 1.6167 and if we have a H1 close above, look to short on stop run at the next supply levels. There is literally no demand level from which to consider a long unless we see a short term pullback but that will be too risky.

GU long levels: none  GU short levels:  1.6022, 1.6071, 1.6105, 1.6148, 1.6162, 1.6175, 1.6200

Update 4.40am EST: The GU herd traders are being faded by SM, possible long level setups: 1.6037, 1.6025, 1.6009 - 1.6000