DAILY REVIEW 18 Dec 2013
EU: The Daily candle is a below-average spread (59pips) bull downthrust closing off the high on low vol<4days. The candle close suggests selling and the volume suggests no demand. No change in Levels of interest: Daily/Weekly swing high 1.3831 Test of Daily breakout level 1.3868 25Oct2013 There is a trading range from 1.3708 – 1.3810 with TR1 1.3708 – 1.3758 and TR2 1.3758 – 1.3810 The Asian range is 1.3762 – 1.3772 currently, almost déjà vu with yesterday’s Asia range as SM pushed all the way to stop hunt below the 1.3727 level yesterday. We are in a trading range situation so it makes sense to trade the range high and low pre-FOMC if we get a setup. Anything in-between is risky although it is possible to take EU long from Asia low (confluence with TR middle 1.3758 and ema200 1.3760) but clear SM manipulation is required and stops should be as tight as possible. DailyFx states “The ECB’s balance sheet has declined by -24.6% in the 52-weeks ending December 6, 2013; to contrast, the Federal Reserve’s balance sheet has grown by +36.8% over this same period; and the Bank of Japan’s has growth by +40.7%.” SM cannot ignore the fundamentals and is likely to move EU up regardless of whether the FED tapers in Dec or Jan. In the event of a Dec taper, SM will likely use the FOMC news to whipsaw EU before reversing upward. The fact that the majority of open positions on most platforms are short makes it even more likely for SM to do so. 
EU long levels: 1.3727, 1.3713, 1.3695, 1.3650, 1.3620, 1.3600 EU short levels:  1.3810, 1.3830, 1.3870, 1.3895, 1.3985, 1.4155, 1.4200, 1.4250

GU: The Daily candle is a large spread (119pips) bear wide-body spinning top on low vol>1day. The candle close suggests that there is buying and the volume suggests no selling interest. Levels of interest: H4/demand level 1.6190 – 1.6215 H4/daily supply levels: 1.6524 – 1.6533, 1.6555 – 1.6571, 1.6600 – 1.6620, breakout level 1.6480 Yesterday, SM tested broke Friday’s low and stop hunted the 1.6225 level going down to 1.6215 before reversing upward. Downward Swing range is now 249pips which is about what we could expect in a retracement move and price has taken stops just below the Daily 38.2%Fib 1.6231 The Asian range is 1.6260 – 1.6287 currently. The GU is likely to move together with the EU later with the FOMC news release as its movement will be based on USD strength/weakness and not cross-pair manipulation. SM is likely to maintain buying pressure to test the 1.6300 key level or perhaps yesterday’s high before reversing downward to retest at least 1.6225 before reversing upward. A H1/H4 close below yesterday’s low will likely see prices test the 1.6200 key level and lower.
GU long levels:  1.6225, 1.6196, 1.6150, 1.6132 GU short levels: 1.6354, 1.6420, 1.6480, 1.6500, 1.6533, 1.6580, 1.6600, 1.6620, 1.6660, 1.6735, 1.6750