DAILY REVIEW 16 May 2014
EU: The Daily candle is a near normal spread (82pips) bear reverse upthrust closing on very high vol>4days. The candle and volume suggests more upside. Levels of interest: Demand: short-term- 1.700 key level, 1.3688 (Fib61.8% confluence) Daily 1.3572 (Fib78.6% confluence) 1.3650 – 1.3642 (Fib50% confluence) 1.3576 – 1.3561 (Fib78.6% confluence) 1.3551 (H4 pivot) 1.3525 – 1.3512 (Fib88.6% confluence) Supply: short-term: 1.3730, 1.3750, 1.3770, 1.3800, 1.3834 -1.3850, 1.3975, 1.4000 key level Weekly/Daily: 1.4184, 1.4246 pivot. SM pushed prices all the way to the 1.3647 level just missing the pivot at 1.3642 on news before reversing strongly. It must be said that even the good Philly data did little to reverse prices suggesting that this is no ordinary move. Although there might be some selling pressure still on the EU with market talk of a bear squeeze, the market structure tells us otherwise and we should expect upside. SM is likely to test the 1.3730 level before reversing to the 1.3700 or 1.3688 level before reversing upwards. It is very unlikely that SM will be going lower as there would not have been many retail traders long from the lows.    
EU long levels: 1.3700, 1.3688, 1.3672, 1.3660, 1.3641 EU short levels:  1.3730, 1.3750, 1.3770, 1.3800, 1.3833, 1.3975, 1.400

GU: The Daily candle is a near normal spread (74pips) bull closing off the high on high vol>4days. The candle and volume suggests more upside. Levels of interest: Supply:  short-term 1.6761, 1.6805, 1.6820, 1.6905, 1.6918, 1.6995 Weekly/Daily supply level: 1.6991 – 1.7015, 1.7025 – 1.7045 Demand:  short-term- 1.6760, 1.6720 (confluence Fib78.6%), 1.6690 (confluence Fib88.6%), 1.6670, 1.6654 Prices reacted to the US dollar strength plunging to a previous session low 1.6730 and then reversing back to 1.6905 on weakness yesterday. This pair does not look like the re-accumulation is completed yet. SM is likely to continue buying pressure to retest the 1.6905 high yesterday before reversing to fade weak shorts to around 1.6775 or even to yesterday’s low at 1.6752 before reversing back up with several possible turning points along the way..  
GU long levels:  1.6775, 1.6752, 1.6730, 1.6670, 1.6654 GU short levels: 1.6761, 1.6805, 1.6820, 1.6905, 1.6918, 1.6995, 1.7030, 1.7042

Posted at 02.42 am EST