DAILY REVIEW 25 September 2014

EU Analysis:

EU: Daily- The daily candle is a normal spread (89pips) bear closing at the low on low vol<1day. The candle close and volume suggests more downside. Levels of interest: Demand: Daily/Weekly: 1.2777, 1.2754, 1.2661 Supply: short-term: 1.2900, 1.2925, 1.2952, 1.3000, 1.3025, 1.3050 Weekly/Daily: 1.4184, 1.4246 pivot. SM broke the previous pivot low and also pushed past the 1.2754 pivot level convincingly and has since tested the 1.2700 key level already. Now only 40pips or so stand between current price levels and the final pivot low at 1.2661 SM is likely to trap shorts at the 1.2700 key level and fade to around Asia High before reversing to continue the downward momentum to test the 1.2661 level where it is a potential level to take profit and reverse the direction. 

EU long levels: 1.2661  
EU short levels: 1.2782, 1.2800 

GU Analysis 

GU: The daily candle is a normal spread (86pips) bear closing just off the low on low vol<6days. The candle close and volume suggests a lack of selling pressure. Demand: Weekly/Daily:  1.5870, 1.5850 Short term: 1.6350, 1.6320, 1.6248, 1.6058 Supply: Short term: 1.6620, 1.6185, 1.6230 (Gap), 1.6320 (Gap close) Supply Short Term: 1.6415, 1.6475, 1.6505, 1.6550, 1.6585, 1.6600, 1.6622 Prices continued to tank through Asia following EU downward. Yesterday I wrote "they could reverse downward once they have sufficient orders."  SM is likely to continue to retest yesterday's high of 1.6415 or higher before reversing to resume the downtrend to test the current 1.6050 low. There really is no clear level to trade from at the moment and the only places I would look for a trade would be the pivot high at 1.6523 and pivot low at 1.6161 However, for traders used to taking positions within trading ranges, you can use the TDI as shown to short on confirmation of the divergence by volume and price action, particularly good when it happens at confluence levels such as Fibs as well. The red vertical lines show the previous bearish divergence and the trade setup short. The white vertical lines and pivots on the chart and the green horizontal lines on the TDI show the levels that we watch for divergence and price to be confirmed by volume-price-reaction.

GU long levels: 1.6161, 1.6050, 1.5870 
GU short levels: 1.6523, 1.6585, 1.6600, 1.6622 

Posted at 05.05 am EST