DAILY REVIEW 30 Oct 2013
EU: The Daily candle is a below-average spread (77pips) bear closing off the low on low vol>7days. The candle close and volume suggests more downside. The Asian range is 1.3732 – 1.749 and not done yet. Price action yesterday saw SM spike up to grab stops above 1.3800 on poor US news and it looks like the correction has begun as price has closed below the daily congestion level low of 1.3741 With the FOMC coming up later, we can expect SM to do their thing again whipping price around as there are no clear levels to long and SM is not actually going to hand us a nice beautiful short level unless they first convince us that it is going up. Based on the current structure, the levels of interest for a potential long would be 1.3710 (previous month high), 1.3700 key level, Daily demand level 1.3650 – 1.3675 confluence with daily Fib23.6% @ 1.3660 Levels of interest for a possible short before FOMC would be 1.3775 (price has rotated around this level several times) and 1.3800 key level as well as the higher supply levels. FOMC has the impact to change sentiment and with the perspective of the current monthly chart showing a slightly increased buying activity (current and may change based on FOMC), it would not surprise me if prices push back all the way up before the correction. SM is likely to create selling pressure from around the Asia high to induce even more shorts before fading these traders by reversing upward into a stall before the FOMC. If the lower long levels are reached, the trades are likely retracement-type trades but if the drop is shallow, we may expect a test of the higher supply levels. This is not impossible given the recent US government shutdown possibly being the excuse to delay the reeling in of QE, especially if they mention dates that are further than anticipated.
EU long levels: 1.3732, 1.3710, 1.3700, 1.3670, 1.3650 EU short levels: 1.3775, 1.3808, 1.3820, 1.3865, 1.3900


GU:  The Daily candle is a large spread (122pips) bear closing near the low on high vol>7days.The candle close and volume suggests more downside. Price has a daily close below the daily Fib23.6% and looks set to test the Fib38.2% @ 1.5940 confluence with daily ema50 @ 1.5932 Previously, price went below to 1.5920 and spiked below as well so the level is not as clear as it could be. The Asian range is 1.6023 – 1.6056. Enough said about the FOMC, it will affect GU in much the same way. There are still significant orders piled above so it may tempt SM to smash and grab some if the news permits.  SM has created some kind of a “support” level and created buying pressure to induce more shorts but this is likely to be a reload strategy prior to the FOMC news. 
GU long levels:  1.6000, 1.5920, 1.5900  GU short levels:  1.6065, 1.6100, 1.6120 (previous breakout level), 1.6142, 1.6200, 1.6220, 1.6259, 1.6325, 1.6353, 1.6380