DAILY REVIEW 3 June 2014
EU: The Daily candle is a small spread (49pips) bear closing near the low on low vol<4days. The candle close and volume suggests more downside. 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: 1.3642, 1.3667, 1.3687, 1.3730 Weekly/Daily: 1.4184, 1.4246 pivot. The lower than expected German CPI coupled with the market expectation of an ECB interest rate cut plus the adjusted ISM manufacturing data caused prices to tank as the market discounted the Euro ahead of the ECB rate decision on Thursday. SM actually pushed prices to 1.3587 yesterday, just 2 pips shy of the pivot low at 1.3585 so it is possible that some breakout shorts could have been triggered by spread-widening as well. SM is likely to create buying pressure to around yesterday's high 1.3636 before reversing to continue the downward move.

EU long levels: 1.3587, 1.3561, 1.3572 - 1.3561 (Fib 61.8% confluence), 1.3476, 1.3399, 1.3294  EU short levels: 1.3636, 1.3650, 1.3667, 1.3687, 1.3730, 1.3750

GU: The Daily candle is a small spread (42pips) bear closing about 1/2 off the low on low vol<4days. The candle close and volume suggests a current lack of selling pressure. 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 SM dropped and reversed from 1.6723 (we expected 1.6724) and reversed after which prices continued to oscillate. SM is likely maintain buying pressure to test the 1.6776 or higher before reversing to continue the downward move. Note that we have some key UK news news today that could be the fuel for these moves.
GU long levels:  1.6730, 1.6715, 1.6692, 1.6670, 1.6654 GU short levels: 1.6781, 1.6833, 1.6857, 1.6875, 1.6905, 1.6918, 1.6995, 1.7030, 1.7042

Posted at 11.31 pm EST