DAILY REVIEW 11 September 2014

EU Analysis:

EU: The daily candle is a normal spread (79pips) bear spinning top closing on very high vol>68 days. The candle close and volume suggests more downside since after all that volume, price was unable to close above Tuesday's high or close. Levels of interest: Demand: Daily/Weekly: 1.2777, 1.2754, 1.2661 Supply: short-term: 1.3025, 1.3050 Weekly/Daily: 1.4184, 1.4246 pivot. SM is likely to test the 1.2930 level or higher before reversing to test the current pivot low at 1.2858 or lower. The immediate and longer term bias is still short.

EU long levels: 1.2777, 1.2754, 1.2661  
EU short levels: 1.2957, 1.2987, 1.3025, 1.3050 

GU Analysis

GU: The daily candle is a large spread (178pips) bull closing off the high on ultrahigh vol>196days. The candle close and volume suggests more upside. Note that it did not engulf the Monday candle stopping short of the Monday high. Demand: Weekly/Daily:  1.5870, 1.5850 Short term: 1.6058
Supply: Short term: 1.6158, 1.6185, 1.6230 (Gap), 1.6320 (Gap close) 
Yesterday I wrote "The candle close and volume suggests profit taking and commencement of fading out of weak shorts..... SM is likely to test the highs of 1.6158 or higher before reversing to retest the low" - I just didn't expect them to drop past Tuesday's low and climb 170pips! The huge volume does suggest profit taking. Price is now at a significant level of the gap 1.6232 and the gap close 1.6320 within reach. With the Scottish Independence vote next Thursday 18 September 2014, we can expect a lot of volatility. It is likely that the SM will find a good level to reload on shorts and then resume the downtrend. SM is likely to test the gap 1.6232 or higher before reversing to continue the downward movement. The longer term bias is still short.

GU long levels: 1.6050, 1.5870 
GU short levels: 1.6232 (Gap), 1.6320 (Gap close), 1.6340 

Posted at 01.00 am