DAILY REVIEW 19 Dec 2013
EU: The Daily candle is a large spread (137pips) bear closing just off the low on high vol>8days. The candle close and volume suggests more downside. Levels of interest: Daily/Weekly swing high 1.3831 A quick review of the FOMC shows market reaction as expected and the whipsaw down and back up was also expected owing to the relatively small taper. SM had in the first hour dived down to the 1.3700 key level and then reversed up to 1.3810 effectively wiping all weak longs/shorts off the board. It seemed that the stage was set for more up. However, the question and answer with Ben Bernanke was the game changer as Ben said that the FED could taper at every meeting. This effectively means that in theory, the FED’s balance sheet will be “healthier” with each meeting, this is a fundamental change and the market stalled and tanked shortly after. Levels of interest: 1.3600 key level – this is the previous daily breakout level and must hold in order for price to continue upward. We may see price compress as it reaches this level if it breaks and closes below the 1.3650 level. The Asian range is 1.3648 – 1.3693 currently. SM will likely create buying pressure to fade the weak shorts before reversing downwards to test the low.
EU long levels: 1.3650, 1.3620, 1.3600 EU short levels: 1.3758, 1.3775, 1.3810, 1.3830, 1.3870

GU: The Daily candle is a very large spread (222pips) bull closing slightly more than 1/3 off the top on high vol>8days. The candle close suggests that there is selling and the volume suggests buying. Levels of interest: yesterday-tested breakout level 1.6480 Prices actually took stops above the previous swing high making a new high in 1.6483 before the FOMC gave SM cause to remove weak longs. The Asian range is 1.6364 – 1.6396 currently. Although there is climatic volume in H4, price action after taking out the 1.6464 level failed to show real absorption volume for a continuation as it failed to close above the 1.6464 level or close to it. Furthermore, the bulk of long positions from the recent 1.6215 swing up may still be in the SM inventory. This would suggest two possibilities, the first is that SM has distributed all its long positions which is rather improbable given the duration was so short at the swing high. The second is that SM has taken out the stops of the short traders and will retest the high for supply and distribute on the way back up to that level. 
GU long levels:  1.6340, 1.6320, 1.6270, 1.6225, 1.6196, 1.6150, 1.6132 GU short levels: 1.6354, 1.6420, 1.6455, 1.6480