DAILY REVIEW 31 October 2014

GENERAL NOTE: Today is the last trading day of the month and also a Friday, the last trading day of the week. SM will need to book profits and likely take new positions prior to Monday. You can expect volatility as SM may whipsaw prices up and down to achieve their objectives to close out the month.

EU Analysis:

EU: Daily- The candle is a normal spread (92pips) bear hammer closing on very high vol>9days. The candle close and volume suggests buying and possibly more downside. Levels of interest: Demand: 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2645, 1.2694, 1.2695 Background: The FED's decision to remove QE after 6 years coupled with Euro weakness means continued strengthening of the USD. Prices pulled back somewhat at the 88.6% yesterday as SM spiked the level during the US news release trapping weak shorts and taking them out before resuming the downward move today. The Oanda oreder book shows the potential stack of orders at the 1.2625 - 1.2660 level where price might potentially stall. Potential structure high is 1.2631. Price has already made a lower lows today 1.2540 SM looks to have trapped weak breaout short traders and is likely to fade them to around the 1.2631 level or higher before reversing to continue the downtrend. 

EU long levels: 1.2535, 1.2500

EU short levels: 1.2631, 1.2645, 1.2694, 1.2695

GU Analysis:

GU: Day- The candle is a normal spread (87pips) bear small body spinning top closing on low vol>6days. The candle close and volume suggests buying and more downside. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6137, 1.6150, 1.6183, 1.6225, 1.6400, 1.6492, 1.6523 Oanda order book shows possible stackes at 1.6000, 1.6025 and 1.6050 (peak). Prices have not gone lower yet but SM is likely to fade weak shorts to around 1.6037 or higher before reversing to continue the downward move to test the pivot low 1.5874 on its way to 1.5853. Note that GU may find demand again back at the current swing low 1.5874 to the 1.5853 pivot.

GU long levels: 1.6120, 1.6105, 1.6081, 1.6063, 1.5853 
GU short levels: 1.6037, 1.6060, 1.6082, 1.6100, 1.6121, 1.6150, 1.6183, 1.6225, 1.6286

Posted at 5.05 am EST

DAILY REVIEW 30 October 2014

EU Analysis:

EU: Daily- The daily candle is a large spread (145pips) bear closing at the low on very high vol>8days. The candle close and volume suggests more downside. Levels of interest: Demand: short-term 1.2535, 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2613, 1.2645, 1.2694, 1.2695 Background: The fundamental weakness of the Euro cobined with the the FED's decision to remove QE after 6 years caused EU to tank immediately resuming the downward bias. Yesterday, I wrote "The release of the FOMC minutes later today will likely be nothing more than the fuel for prices to get up to supply levels and then resume the downtrend" and identified a stack of orders at the 1.2760 level where price might potentially stall, prices went to 1.2769 and then tanked. Price did exactly as analyzed yesterday and with lower lows today as the market pushes toward the 1.2500 key level, SM is likely to maintain selling pressure to around the 1.2535 level or lower before reversing back to remove weak shorts to around the 1.2613 or higher and then reversing to continue the downtrend. 

EU long levels: 1.2535, 1.2500

EU short levels: 1.2613, 1.2645, 1.2694, 1.2695

GU Analysis:

GU: Day- The candle is a large spread (158pips) candle closing near the low on low vol>3days. The candle close and volume suggests more downside. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6080, 1.6105, 1.6121, 1.6150, 1.6183, 1.6225, 1.6400, 1.6492, 1.6523 As analyzed, the volume divergence kicked into effect and GU nose-dived on release of the FOMC minutes. Prices have already gone lower in Asia and have broken the 1.5993 pivot. SM is likely to reverse and fade weak shorts to around 1.6000 or even to around 1.6033 before reversing to continue the downward move to test the pivot low 1.5874 on its way to 1.5853. Note that GU may find demand again back at the current swing low 1.5874 to the 1.5853 pivot.

GU long levels: 1.6120, 1.6105, 1.6081, 1.6063, 1.5853 
GU short levels: 1.6121, 1.6150, 1.6183, 1.6225, 1.6286, 1.6400, 1.6492, 1.6523 

Posted at 5.33 am EST

DAILY REVIEW 29 October 2014

EU Analysis:

EU: Daily- The candle is a below-average spread (80pips) bull closing 1/3 off the high on low vol<1day. The candle close and volume suggests more upside. Levels of interest: Demand: short-term 1.2715, 1.2705, 1.2690, 1.2605, 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2764,1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000. Background: The Euro remains fundamentally weak.  Even with headlines like " EUR bank stress tests results not as bad as feared, EUR higher!", the fact is that 24 banks failed the stress test and papering over the cracks is at best a temporary stop gap measure. Another fact is that the US economy is recovering, not as quick as the FED would like but still, it is recovering. Fundamentally this means a stronger USD vs EUR. The release of the FOMC minutes later today will likely be nothing more than the fuel for prices to get up to supply levels and then resume the downtrend. Therefore the bias remains DOWN for the longer term trend. Current SM trend is UP but we will likely have the downtrend continuation after FOMC as SM takes profit and reverses with fresh sell orders from higher levels. The retail order positions on Oanda (see chart above) show some peaks at 1.2760, 1.2850, 1.3000. With the bulk of traders trapped short and stops plus fresh orders above, the SM will want to get rid of these poor souls before resuming the downtrend. Price did exactly as analyzed yesterday, pushing higher yesterday to 1.2764 before retracing downward. SM is likely to create selling pressure to remove weak longs once more to around the 1.2715 - 1.2690 level before reversing back to retest yesterday's high or higher and then reversing to continue the downtrend.

EU long levels: 1.2715, 1.2705, 1.2690, 1.2605, 1.2500

EU short levels: 1.2764, 1.2785, 1.2826, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000

GU Analysis:

GU: Day- The candle is a normal spread (94pips) bull small body spinning top closing on low vol>1day. The candle close and volume suggests the possible commencement of absorption of buying. There is also volume divergence over the past week suggesting that buying pressure is waning. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6080, 1.6105, 1.6121, 1.6150, 1.6183, 1.6225, 1.6400, 1.6492, 1.6523 As analyzed, SM pushed prices higher yesterday to 1.6181, just 2 pips shy of our anticipated level before retreating downward. SM has faded weak longs to Asia low 1.6127 level. The Oanda retail stacks are seen at 1.6175, 1.6200, 1.6275, 1.6300 After removing weak longs by about 50 pips,SM is likely to test Asia low or lower to around 1.6120 - 1.6110 before reversing to continue the upward move to test yesterday's high 1.6181 or higher before reversing to continue the downtrend. Note that GU may find demand again back at the current swing low 1.5874 to the 1.5853 pivot.

GU long levels: 1.6120, 1.6105, 1.6081, 1.6063, 1.5853 
GU short levels: 1.6121, 1.6150, 1.6183, 1.6225, 1.6286, 1.6400, 1.6492, 1.6523 

Posted at 2.09 am EST

DAILY REVIEW 28 October 2014

EU Analysis:

EU: Daily- The candle is a small spread (57pips) bull closing 1/2 off the high on high vol>6days. The candle close and volume suggests more upside but also possible absorption of buying. Levels of interest: Demand: short-term 1.2660, 1.2605, 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2724, 1.2740 (Monthly ema200), 1.2751,1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000. Background: The Euro is fundamentally weak.  As expected, all the scrambling to "get the house in order" has resulted in headlines such as " EUR bank stress tests results not as bad as feared, EUR higher!" When we couple this with the rumours swirling in the market of the FED hinting that the anticipated and expected rate hikes may not materialize next year, the forthcoming FOMC and other European news will continue to be significant as the FED and the ECB slug it out for the title of undisputed "Heavyweight Weaker Grouping of the World".  Like I wrote yesterday, if there is any such comment during the FOMC meeting this week, USD could go belly up and EU could skyrocket as a result. The retail order positions on Oanda remain largely unchanged from yesterday and the bias remains DOWN. Price did exactly as analyzed yesterday, pushing higher yesterday to 1.2722, just 2 pips shy of the identified 1.2724 level before retracing downward. SM is likely to create selling pressure to remove weak longs to around the 1.2680 - 1.2690 level before reversing back to retest yesterday's high or higher before reversing to continue the downtrend.

EU long levels: 1.2680, 1.2670, 1.2605, 1.2500

EU short levels: 1.2724, 1.2740, 1.2750, 1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000

GU Analysis:

GU: Day- The candle is a below average spread (64pips) bull closing 1/2 off the high on low vol<29days. The candle close and volume suggests no buying interest but we can expect more upside to structure levels. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6080, 1.6105, 1.6121, 1.6150, 1.6183, 1.6225, 1.6400, 1.6492, 1.6523 As analyzed, SM pushed prices higher yesterday to 1.6141 before retreating downward. SM is likely to continue to fade weak longs to around the 1.6100 level or lower to 1.6081 before reversing to continue the upward move to test yesterday's high 1.6141 or higher before reversing to continue the downtrend. Note that a close below yesterday's low 1.6081 will likely indicate the continuation downtrend has resumed. 

GU long levels: 1.6105, 1.6081, 1.6063, 1.5853 
GU short levels: 1.6121, 1.6150, 1.6183, 1.6225, 1.6286, 1.6400, 1.6492, 1.6523 

Posted at 2.09 am EST

DAILY REVIEW 27 October 2014

EU Analysis:

EU: Weekly-The candle is an average spread (226pips) bear spinning top closing about 1/3 off the low on very high vol<2weeks. The candle close and volume suggests absorption of selling. Daily- The candle is a below average spread (60pips) bull closing 1/2 off the high on low vol<18days. The candle close and volume suggests a reduced demand, typical of SM markup. Levels of interest: Demand: short-term 1.2660, 1.2605, 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2724, 1.2740 (Monthly ema200), 1.2751,1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000. Background: The Euro is fundamentally weak.  With the European banks stress tests resulting in potentially 8 failing with the lion's share based in Italy, the ECB will do everything to avert and avoid any kind of panic in the market. This being the case, the forthcoming FOMC and other European news will be impactful. However, there is already rumours in the market that the anticipated and expected rate hikes may not materialize next year. If there is any such comment during the FOMC meeting this week, USD could tank and EU could rocket North as a result. Prices opened slightly gapped up as SM removed weak shorts. SM is still likely to be in the process of removing weak shorts have already pushed past the 1.2700 key to an Asia high of 1.2713 and will likely test 1.2750 or higher before reversing." Retail order positions on Oanda still suggest the 1.2750 level as the highest order stacks. The bias remains DOWN.

EU long levels: 1.2660, 1.2605, 1.2500

EU short levels: 1.2724, 1.2750, 1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000

GU Analysis:

GU: Week-The candle is a below average (189pips) bear "near doji" closing on high vol<2weeks. The candle close and volume suggests absorption of buyers. Day- The daily candle is a below-average spread (65pips) bear closing 1/2 off the low on low vol<12days. The candle close and volume suggests a lack of selling pressure but we can expect more downside. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6080, 1.6105, 1.6121, 1.6150, 1.6183, 1.6225, 1.6400, 1.6492, 1.6523 GU is in a longer term downtrend and has a short bias. However, there is a clear short term SM "uptrend" in place from a small reaccumulation structure. SM is likely to continue to fade weak longs to around the 1.6063 level before reversing to continue the upward move to test 1.6121 or higher before reversing to continue the downtrend. Note you can already see the 1.6105 level indicated last week taken out, prices likely to go higher. 

GU long levels: 1.6063, 1.5853 
GU short levels: 1.6121, 1.6150, 1.6183, 1.6225, 1.6286, 1.6400, 1.6492, 1.6523 

Posted at 4.41 am EST

DAILY REVIEW 24 October 2014

EU Analysis:

EU: Daily- The candle is a below average spread (66pips) bear "near doji" closing on low vol<13days. The candle close and volume suggests lack of selling pressure but we can expect more downside. Levels of interest: Demand: short-term 1.2605, 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2690, 1.2724, 1.2740 (Monthly ema200), 1.2751,1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000. Background: The fundamentally weak Euro plus the ECB's decision to purchase corporate bonds plus possible new QE has knocked the Euro back onto the ropes. Price has retreated from the 1.2613 level and kept a tight range. Yesterday I wrote "SM is in the likely in the process of removing weak shorts are are likely to push back to test the 1.2690 or higher to around 1.2724 before reversing." Retail order positions on Oanda still suggests the 1.2750 level as the highest order stacks. The bias is still DOWN. SM is likely to create buying pressure to test yesterday's high 1.2676 or higher to 1.2724 before reversing to resume the downtrend.

EU long levels: 1.2605, 1.2500

EU short levels: 1.2676, 1.2690 - 1.2700, 1.2724, 1.2740, 1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000

GU Analysis:

GU: Day- The daily candle is a below-average spread (65pips) bear closing 1/2 off the low on low vol<12days. The candle close and volume suggests a lack of selling pressure but we can expect more downside. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6080, 1.6105, 1.6121, 1.6150, 1.6183, 1.6225, 1.6400, 1.6492, 1.6523 Price only went up to 1.6159 yesterday as SM oscillated prices to reverse upward. A look at Oanda retail open positions reveal more traders trapped short than long and with limit orders closer northward than below prices. However, there is no clear level where these orders "peak" until above 1.6100 and at 1.6200 With the high impact UK retail news coming out later, it is not unusual for prices to spike 100 pips or more making the 1.6100 to 1.6225 all possibilities. SM is likely to continue to fade weak shorts from the breakout of yesterday's low to around the 1.6105 or higher before reversing to continue the downward move.  

GU long levels: 1.5853 
GU short levels: 1.6080, 1.6105, 1.6121, 1.6150, 1.6183, 1.6225, 1.6286, 1.6400, 1.6492, 1.6523 

Posted at 02.18 am EST

DAILY REVIEW 23 October 2014

EU Analysis:

EU: Daily- The candle is a normal spread (102pips) bear closing at the low on low vol<3days. The candle close and volume suggests more downside. Levels of interest: Demand: short-term 1.2647, 1.2624, 1.2605, 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2690, 1.2724, 1.2740 (Monthly ema200), 1.2751,1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000. Background: The fundamentally weak Euro plus the ECB's decision to purchase corporate bonds plus possible new QE has knocked the Euro back onto the ropes. Price has already made a lower low today and is reversing from the 1.2613 level in accordance with the daily continuing volume divergence. SM is in the likely in the process of removing weak shorts are are likely to push back to test the 1.2690 or higher to around 1.2724 before reversing. A look at retail order positions on Oanda suggests the 1.2750 level as the highest order stacks. However, be mindful that SM will resume once they have sufficient orders to resume the move down. They can either spike up on news to trap longs or oscillate slightly lower to build positions before reversing to resume the downtrend. The bias is still DOWN. 

EU long levels: 1.2605, 1.2500

EU short levels: 1.2690 - 1.2700, 1.2724, 1.2740, 1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000

GU Analysis:

GU: Day- The candle is a normal spread (119pips) bear closing 1/2 off the low on low vol<1day. The candle close and volume suggests reduced selling pressure and more downside. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6225, 1.6400, 1.6492, 1.6523 The bearish volume divergence played out but missed testing the 1.6225 pivot, only going up to 1.6183 yesterday. The downtrend continuation looks to have resumed as price actually pushed lower on poor UK news as I am writing. SM is likely to fade weak shorts from the breakout of yesterday's low to around the 1.6031 - Asia low or higher to 1.6050 before reversing to continue the downward move.  

GU long levels: 1.6040, 1.6028, 1.5853 
GU short levels: 1.6031, 1.6050, 1.6105, 1.6121, 1.6183, 1.6225, 1.6286, 1.6400, 1.6492, 1.6523 

Posted at 05.12 am EST

DAILY REVIEW 22 October 2014

EU Analysis:

EU: Daily- The candle is a large sprea (125pips) bear closing at the low on low vol>1day. The candle close and volume suggests more downside. Levels of interest: Demand: short-term 1.2647, 1.2624, 1.2605, 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2740 (Monthly ema200), 1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000. Background: The fundamentally weak Euro vs the FED's wait and see strategy resulted in a pullback from the downtrend removing lots of weak shorts. Monday started with the FEDs Rosengern saying that the conditions are right for the FED to end QE after the October meeting. Yesterday, rumours of the ECB buying corporate bonds and the ECB being one step closer to QE looks like these news have finally given SM the fuel to start resume the downward move without taking prices back to the 1.2900 - 1.3000 level. Although prices look to be back into the downtrend, we may see another spike back up if the US CPI data is poor. SM is likely to test the 1.2661 level or lower to 1.2865 before reversing to test Asia low at 1.2787 or lower to around the 1.2750 level before the push back up to 1.2900 and higher.

EU long levels: 1.2647, 1.2624, 1.2605, 1.2500

EU short levels: 1.2740, 1.2785, 1.2840, 1.2900, 1.2950, 1.2975, 1.3000

GU Analysis:

GU: Day- The candle is a below average spread (74pips) bear closing at the low on low vol>1day. The candle close and volume suggests more downside. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6225, 1.6400, 1.6492, 1.6523 The bearish volume divergence played out but missed testing the 1.6225 pivot, only going up to 1.6183 yesterday. The downtrend continuation looks to have resumed. SM is likely to fade weak shorts to around the Asia low of 1.6105 or higher to 1.6121before reversing to continue the downward move. A close above 1.6130 will likely see the highs retested.  

GU long levels: 1.6040, 1.6028, 1.5853 
GU short levels: 1.6105, 1.6121, 1.6183, 1.6225, 1.6286, 1.6400, 1.6492, 1.6523 

Posted at 06.58 am EST

DAILY REVIEW 21 October 2014

EU Analysis:

EU: Daily- The candle is a normal spread (85pips) bull spinning top closing on low vol<9days. The candle close and volume suggests more upside but with reduced buying pressure. Levels of interest: Demand: short-term 1.2740 (Monthly ema200), 1.2724 (H1ema200), 1.2700, 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2900, 1.2950, 1.2975, 1.3000. Background: The fundamentally weak Euro vs the FED's wait and see strategy. Yesterday I wrote "SM is likely to create selling pressure and test Asia low (1.2735) or lower before reversing upwards" and this happened with price going to 1.2730 yesterday and pushing to new highs. Price has since made new current high of 1.2836 today. With the US news out later, SM is likely to test the 1.2845 level or higher to 1.2865 before reversing to test Asia low at 1.2787 or lower to around the 1.2750 level before the push back up to 1.2900 and higher.

EU long levels: 1.2787, 1.2740, 1.2720, 1.2700

EU short levels: 1.2900, 1.2950, 1.2975, 1.3000

GU Analysis:

GU: Day- The candle is a normal spread (99pips) bull spinning top closing on low vol<8days. The candle close and volume suggests more upside with reduced buying pressure and also continued volume divergence indicating reduced buying with higher prices. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6225, 1.6400, 1.6492, 1.6523 Price has pushed higher since Asia to 1.6183 as of writing. With the upcoming UK news, SM is likely to test the 1.6225 pivot or higher before reversing.  

GU long levels: 1.6040, 1.6028, 1.5853 
GU short levels: 1.6225, 1.6286, 1.6400, 1.6492, 1.6523 

Posted at 03.55 am EST