DAILY REVIEW 26 May 2014
EU: Weekly- the candle is a small spread (118pips) bear closing near the low on low vol<3weeks. The candle close and volume suggests more downside. The Daily candle is a small spread (43pips) bear closing near the low on low vol<2days. The candle close and volume suggests reduced selling and continued buying at the lows. 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: 1.3662, 1.3687, 1.3730 Weekly/Daily: 1.4184, 1.4246 pivot. SM has closed below the 1.3642 pivot and is probably heading to test the 1.3561 level. SM opened slightly gapped down but has since closed it by a 28 pips whiplash price action that also broke last week's low. SM will likely want to remove weak shorts before continuing downwards. It is unlikely that there will be retail traders going long and that means that to attract orders, SM is likely to induce more shorts by testing the current low of 1.3612 or lower to the 1.3600 key level before reversing to around 1.3662 or 1.3687 or 1.3730 depending on how the orders stack up.

EU long levels: 1.3561, 1.3572 - 1.3561 (Fib 61.8% confluence), 1.3476, 1.3399, 1.3294  EU short levels:  1.3662, 1.3687, 1.3730, 1.3750


GU: Weekly- the candle is a small spread (118pips) bull upthrust on low vol>5weeks. The candle close and volume suggests more downside. The Daily candle is a below average spread (62pips) bear closing off the low on low vol<4days. The candle close and volume suggests more downside. 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 Prices opened gapped up and spiked to 1.6823 before reversing back upwards. UK news was good last week but GU got dragged down by USD strength. SM is likely to remove weak shorts to around the 1.6855 or even to the 1.6875 level before reversing back down to test 1.6800.
GU long levels:  1.6812, 1.6800, 1.6730, 1.6670, 1.6654 GU short levels: 1.6855, 1.6875, 1.6905, 1.6918, 1.6995, 1.7030, 1.7042


Posted at 03.45 am EST