DAILY REVIEW 09 Dec 2013
EU: Weekly – the candle is a below-average spread (182pips) bull closing at the high closing on high vol>17days. The candle close and volume suggests more upside. The Daily candle is a large spread (87pips) bull closing at the high on average vol<2days with daily bearish volume divergence. The candle close suggests further upside but the volume suggests a lack of demand. Levels of interest:  Daily Fib 61.8% @ 1.3622 Daily Fib 78.6% @ 1.3715 confluence with H4 breakout level 1.3735, Daily Fib88.6% @ 1.3770 confluence with H4 supply level 1.3771 – 1.3790 Test of Daily breakout level 1.3868 25Oct2013 swing high 1.3831 As anticipated, SM used the NFP news on Friday to wipe out another bunch of weak shorts who jumped in on the “strong” NFP numbers. Price opened today with a small gap up taking out any remaining shorts and has closed the gap with the Asian range currently 1.3699 – 1.3720. The current H4 swing low to high is about 325pips and given that we had two days (Thursday and Friday) of inefficient news moves, it suggests that the main participants long now are the SM. So the question is what will they be likely to do with a bucketful of long orders? We are possibly at a very key level as a daily close above 1.3850 will likely expose the 1.4000 – 1.4500 levels. Therefore this area could be a potential launch pad for further assault on the higher supply levels or a major reversal level. Potential TR Lower: 1.3610 – 1.3650 TR Upper: 1.3650 – 1.3720. Having closed the gap, if SM retests the high or higher inducing longs before reversing to take profit (remember they have many long orders), they are likely to reverse back up again once they have re-stocked long orders. If SM keeps the selling pressure from today’s highs, they will also likely reverse back upwards once they have sufficient orders again. Either way, SM is likely to test the 1.3830 level sometime soon unless we get some tape bomb that cause USD to strengthen or EURO to weaken fundamentally, which I believe is unlikely with Euro interest rate decision out of the way.
 EU long levels: 1.3650 1.3620, 1.3600, 1.3582, 1.3558 EU short levels:  1.3720, 1.3780, 1.3800, 1.3825

GU: Weekly- the candle is a small spread (152pips) bear small-bodied spinning top closing on high vol>17days. The Daily candle is a normal spread (103pips) bull small-bodied spinning top closing on high vol<2days. (will update later)