DAILY REVIEW 18 Mar 2014
EU: The Daily candle is a below average spread (68pips) bull small-bodied spinning top closing on low vol<3days. The candle close and volume suggests more downside and the bear trap looks ready to be sprung. Levels of interest: Demand: short term-  1.3903 – 1.3895, 1.3883 – 1.3868 (confluence H1 ema200), 1.3850 – 1.3832, 1.3810 – 1.3790 The Asian range is 1.3919 – 1.3936 currently. Background: The Russian recognition of Crimea as an Independent State and sanctions by the EU and US escalates the uncertainty in the market. This uncertainty will likely result in safe haven flows i.e. the buying of USD, JPY, Gold and government bonds. This will give SM time to accumulate their positions in small TRs until a possible resolution or until the market starts to discount the crisis. Crosses involving the AUD will also be vulnerable as AUD tends to strengthen in tandem with Gold. SM is likely to induce breakout traders to yesterday’s high or the current swing high of 1.3965 before fading them back to around the 1.3900 level or lower before reversing back up. A break and close below the 1.3800 handle will likely be on more risk aversion and see price likely test and reverse at the 1.3750 level instead.
EU long levels: 1.3900, 1.3880, 1.3845, 1.3800, 1.3750 EU short levels: 1.3865, 1.400, 1.4050

GU: The Daily candle is a small spread (61pips) bear “near doji” closing on low vol<39days. The candle close and volume indicates no selling or buying interest. 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. SM is likely to induce breakout longs at Asia high or at yesterday’s high of 1.6665 before reversing to fade them and re-accumulate 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:  1.6775, 1.6823, 1.6835, 1.6860, 1.7000, 1.7030

Posted at 2.28 am EST