DAILY REVIEW 21 August 2014

EU Analysis:

EU: The Daily candle is a below average spread (69pips) bear closing at the low on very high vol>7days. The candle close and volume suggests more downside. Levels of interest: Demand: Daily/Weekly: 1.3205 Supply: short-term: 1.3300, 1.3330, 1.3355, 1.3382 Weekly/Daily: 1.4184, 1.4246 pivot. The FOMC minutes stoked by the USD hawks fueled USD strength across the board. The market is already pricing in the expected rate hikes even before they have been decided, let alone implemented. This is also while ignoring some poor US data. This makes for a very concerted SM push to significant levels from which any kind of poor data will cause a mini-reversal if not a full blown one. With key German data expected soon, SM would probably use good German news to fade weak shorts before continuing the downward move with the US data that follows later. Look at the charts above to view the levels for possible trades. 

EU long levels: 1.3205  
EU short levels: 1.3300, 1.3330, 1.3355, 1.3382 

GU Analysis:

GU: The Daily candle is a very small spread (89pips) bear closing at the low on high vol>5days. The candle close and volume suggests more downside. Levels of interest: Supply short-term- 1.6600,1.6650, 1.6705, 1.6730 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 Someone skyped me yesterday asking me about chasing long the GU and this was my response, "sell order stacks in GU may require too much effort, better to dive and reload... 5.35am EST) Whew, good thing he heeded otherwise FOMC would have wiped him. Anyway, we do have UK data later today and SM may use it to test the 1.6548 pivot from which price can possibly reverse and reaccumulate. Note also that GU has practically moved downward with barely a pause from it's current high on 15/7/2014. Look at the charts above to view the levels for possible trades. 

GU long levels: 1.6546, 1.6528, 1.6480, 1.6463 
GU short levels: 1.6600,1.6650, 1.6705, 1.6730

Posted at 01.45 am EST