DAILY REVIEW 17 Mar 2014
EU: Weekly- the candle is a below average spread (133pips) bull spinning top closing on low vol<2weeks. The close and volume suggest “no demand” but based on the location smells of a bear trap. The Daily candle is a normal spread (89pips) bull wide-bodied spinning top closing on high vol<1day. The candle close and volume suggests more downside but without supply above, it is a bear trap. Levels of interest: Demand: short term-  1.3850 – 1.3832 (confluence ema200 H1), 1.3810 – 1.3790 The Asian range is 1.3898 – 1.3915 currently. Background: The referendum in Crimea and the veto of the UN Resolution yesterday by Russia creates uncertainty in the market. Uncertainty will likely lead to safe havn flows meaning the buying of USD, JPY, Gold and government bonds. This will likely be the “perfect storm” for SM to fade all the weak longs from to around the 1.3850 level or lower before reversing back up. A break and close below the 1.3800 handle will see price likely test and reverse at the 1.3750 level instead.
EU long levels: 1.3845, 1.3800, 1.3750 EU short levels: 1.400, 1.4050

GU: Weekly- the candle is a below average spread (173pips) bear closing ½ off the low on low vol<9weeks. The candle close and volume suggests no selling pressure. The Daily candle is a small spread (63pips) bull closing at the high on low vol<1day. The candle close suggests more upside. Levels of interest: Weekly/Daily supply level 1.6835 – 1.6845, 1.6860 – 1.6875, 1.6991 – 1.7015, 1.7025 – 1.7045 Demand:  short-term-  1.6625 1.6610 – 1.6600 The Asian range is 1.6624 – 1.6645 currently. Price opened with a 11pips gap down that has yet to be closed. As expected SM did a bit of Reaccumulation on Friday but there was no reason to push back to the daily supply level yet in view of the Crimea situation. SM is likely to induce longs at Asia high before reversing to fade them and reaccumulate at around the 1.6608 level or even to around 1.6580 before reversing back north to test daily supply. 
GU long levels:  1.6608, 1.6574 GU short levels:   1.6823, 1.6835, 1.6860, 1.7000, 1.7030

Posted at 2.30 am EST