DAILY REVIEW 8 Jan 2014
EU: The Daily candle is a below-average spread (60pips) bear small body spinning top closing on average vol<3days. The candle close and volume suggests no selling pressure and possible demand coming in. Levels of interest: Current swing high 1.3892, Daily/Weekly 61.8%Fib @ 1.3522, 78.6%Fib @ 1.3422, weekly supply approx 1.4200 – 1.4250 H4 ema200 @ 1.3657. The Asian range is 1.3604 – 1.3634 currently. Nothing has changed since yesterday as prices yesterday can be treated as an inside day of Monday and are still within the current TR of 1.3570 – 1.3675 From a price action perspective, there also seems to have a range-within-a-range at 1.3595 – 1.3655 if SM has indeed “shifted the zone” and may not revisit the lower levels with stops below the 1.3600 key level having been taken already. Furthermore, SM has visited the 1.3640 – 1.3655 level twice this week and may have cleared the supply at these levels so a short setup is preferred at the 1.3675 (confluence with H1 ema200 @ 1.3670) if SM wants to hold the TR. Having said that, it looks like SM will continue the buying pressure to the the1.3655 level to induce more shorts and trap them by reversing to the 1.3600 key level  or close to it before reversing back upwards for the test of 1.3675. A H1 close below 1.3600 and test of the TR low @ 1.3570 may lead to more downside.
EU long levels: 1.3605, 1.3597, 1.3575, 1.3520 EU short levels: 1.3675, 1.3818, 1.3892

GU: The Daily candle is a normal spread (64pips) bear very small-body (near doji) spinning top closing on lo vol<3days. The candle close and volume suggests the lack of selling interest. Levels of interest: Daily supply levels 1.6720, 1.6750 Daily demand levels approximately 1.6220 – 1.6215 Daily 88.6%Fib @ 1.6259 78.6%Fib @ 1.6297 The Asian range is 1.6375 – 1.6419 currently. There is hardly any change from yesterday as price action is almost an “inside” day of Monday as well.  SM is likely to maintain buying pressure to the 1.6437 level and reverse to test the Asia session low or lower before reversing back upwards. A H1 close below 1.6347 and test of TR low @ 1.6334 may lead to more downside.
GU long levels:  1.6375, 1.6347, 1.6315, 1.6300, 1.6260, 1.6220 GU short levels:  1.6441, 1.6470, 1.6500, 1.6525, 1.6617, 1.6720, 1.6750