DAILY REVIEW 8 Nov 2013
EU: The Daily candle is a very large spread (234pips) bear pin bar closing 1/2 off the low on ultrahigh vol>70days. Levels of interest: Monday’s low @ 1.3441 daily 50%Fib @ 1.3467 (also Wed Asia low) key level 1.3500 78.6%Fib @ 1.3259 The Asian range is 1.3405 – 1.3424 The unlikely triple-act of the ECB rate cut, US GDP and Yen strength caused the EU to tank and later to retrace significantly. Although the daily candle close and volume suggests more upside, the fundamental news of the ECB would likely weigh on the EU. With NDP later today and optimistic numbers expected, EU is likely to head south. SM has already tested the 1.3441 Monday low and is likely to retest it again. Likely SM move will be to create buying pressure to retest the 1.3448 retracement high yesterday but there will be orders further up and SM may just go higher if they want more inventory for the ride down.
EU long levels: 1.3294, 1.3260 EU short levels:  1.3448, 1.3467, 1.3500, 1.3510


GU:  The Daily candle is a normal spread (105pips) bull hanging man closing just off the high on very high vol>59days, the close and volume suggest selling as price also failed to test yesterday’s high. The Asian range is 1.6076 – 1.6101 Yesterday’s price action saw a strong push downward in synch with the ECB rate decision and US GDP, however, it did not just retrace the entire move but even went back all the way to nearly test the previous day high. This price action either suggests that the way down has been cleared and the movement back up is an inventory resupply exercise or that the inventory resupply was at the lows and price is set to go higher. Given that price is close to the TR breakout level of 1.6120 the daily hanging man shown has credibility but being Friday NFP, one has to be mindful of possible wild swings like yesterday. From a price action perspective, 1.6105 looks like the level where long traders are trapped. SM is likely to create buying pressure to Asia high or higher before revesing. 
GU long levels:  1.6055  GU short levels:  1.6105, 1.6130, 1.6150, 1.6170, 1.6200