DAILY REVIEW 20 May 2014
EU: The Daily candle is a small spread (36pips) bear closing on low vol>1day. The candle and volume suggests no buying interest. Levels of interest: Demand: 1.3650 – 1.3642 (Fib61.8% 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. Prices barely moved yesterday in spite of the French sovereign downgrade rumours and FED members' speeches. SM broke the 1.3684 level only to reverse and fade the breakout shorts. SM should continue the fade to the current trading range high 1.3733 or the breakout 1.3744 level before reversing to retest the pivot low at 1.3647. A close below the 1.3642 pivot will probably see the 1.3561 level tested.
EU long levels: 1.3650, 1.3641, 1.3561 EU short levels:  1.3730, 1.3750, 1.3770, 1.3800, 1.3833, 1.3975, 1.400

GU: The Daily candle is a below average spread (62pips) bull closing almost 1/2 off the high on low vol<1day. The candle close and volume suggests more downside. Levels of interest: Supply:  short-term 1.6850, 1.6861, 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 Yesterday I wrote "... and may push as high as 1.6861 before reversing.." SM pushed to 1.6863 and dropped 42pips and now appears to be coming back up again. With the UK news due today, SM is likely to maintain the buying pressure to test the 1.6863 or even up to the 1.6905 level before reversing to retest the 1.6730 level. A break and close below 1.6730 will likely see a test of the 1.6650 level.  
GU long levels:  1.6730, 1.6670, 1.6654 GU short levels: 1.6863, 1.6905, 1.6918, 1.6995, 1.7030, 1.7042

Posted at 00.15 am EST