DAILY REVIEW 22 May 2014
EU: The Daily candle is a normal spread (88pips) bear reverse upthrust closing on high vol>3days. The candle and volume suggests the commencement of buying. 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. Just pre-FOMC, SM took orders below the 1.3642 level all the way to 1.3633 before reversing back upwards as expected. FED members appear to be preparing for the end of QE and coupled with the possible rate cut in Euro, has led to some US dollar strength. SM is likely to retest the 1.3650 level or the previous pivot at 1.3642 before reversing. A close below the 1.3642 pivot will probably see the 1.3561 level tested.
EU long levels: 1.3642, 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 (90pips) bull closing off the high on high vol>8days. The candle close and volume suggests more upside. Levels of interest: Supply:  short-term 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.." Prices pushed up to 1.6919 yesterday on the UK news and subsequently retraced on the FOMC release. SM is likely to maintain the selling pressure to test yesterday's low at 1.6856 or lower to around 1.6840 level before reversing back upwards.
GU long levels:  1.6856, 1.6840, 1.6730, 1.6670, 1.6654 GU short levels: 1.6863, 1.6905, 1.6918, 1.6995, 1.7030, 1.7042

Posted at 02.26 am EST