DAILY REVIEW 18 August 2014

Wish everyone good trading this week.
EU Analysis:

EU: Weekly- the candle is a small spread (79pips) bear psuedo reverse upthrust on low vol<2weeks. The candle close and volume suggest reduced selling pressure. The Daily candle is a below average spread (52pips) bull closing off the high on average vol>4days. The candle close and volume suggests more upside before reversing back down. Levels of interest: Demand: Daily/Weekly: 1.3330, 1.3300, 1.3292, 1.3250, 1.3205 Supply: short-term: 1.3382, 1.3395, 1.3410, 1.3425, 1.3440, 1.3485, 1.3500 Weekly/Daily: 1.4184, 1.4246 pivot. Generally, nothing has changed the combination of poor EUR news from Germany and France. Prices opened just marginally gapped down by 7pips but having a upward short term bias. SM is likely to create buying pressure to to around the 1.3445 or higher as SM remove weak shorts from the market before reversing back down to test the 1.3300 key level or lower. 

EU long levels: 1.3330, 1.3292, 1.3250, 1.3205  
EU short levels: 1.3395, 1.3410, 1.3425, 1.3445, 1.3465, 1.3482

GU Analysis:

GU: The weekly candle is an above average spread (186pips) bear closing near the low on low vol<4weeks. The candle close and volume suggests more downside but with reduced selling pressure. The Daily candle is a very small spread (24pips) bull closing 1/2 off the high on low vol<2days. The candle close and volume suggests more downside. Levels of interest: Supply short-term- 1.6735, 1.6755, 1.6770, 1.6805, 1.6825, 1.6850 Weekly/Daily supply level: 1.7178 (current pivot high), 1.7365, 1.7910, 1.800 Demand:  short-term-  1.6687, 1.6654, 1.6575, 1.6546, 1.6528, 1.6480, 1.6463  Last week I wrote, "we can expect SM to remove some weak shorts before resuming the move downward if they break and fade weak breakout shorts which will give a retracement trade long to around the 1.6735 level".... Well, BOE's George Carney gave a blockbuster interview published over the weekend essentially saying that the UK recovery is well on track and that there is no need for real wages to rise before increasing interest rates thereby causing the cable to Gap up 43pips on today's open.  SM is likely to maintain the buying pressure to the breakout level of 1.6755 or higher before reversing for the continuation downward to test the gap close level 1.6687 or lower. See the charts posted for possible levels. As always, the demand levels are possible reversal levels but are yet to be confirmed until tested. However, also note that price had pushed very close but has not broken the 1.66548 pivot yet.

GU long levels: 1.66548, 1.6575, 1.6546, 1.6528, 1.6480, 1.6463 
GU short levels: 1.6735, 1.6755, 1.6803, 1.6825

Posted at 04.10 am EST