DAILY REVIEW 14 October 2014

EU Analysis:

EU: Daily- The candle is a large spread (140pips) bull closing just off the high on high vol<4days. The candle close and volume suggests more upside but reducing buying pressure. Levels of interest: Demand: short-term  1.2640, 1.2614, 1.2568, 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2800, 1.2820, 1.2840. Background: Fundamentals for the Euro remain weak. FOMC's refusal to commit to any timetable for a rate hike has given the fuel for weakening of the USD. Yesterday, Fed's Evans says rates are not likely to need to rise until beginning of 2016 giving further cause for the USD to weaken. Yesterday I wrote "This suggests that price will rise further before resumption of the downtrend". Price has pushed even higher to 1.2767 and now retracing. SM is likely to maintain the selling pressure to around yesterday's session breakout level 1.2700 - 1.2697 or lower before reversing upward to test the current pivot high of 1.2790 and possibly push to 1.2800 - 1.2825 level or higher. Note that the technical traders will be looking for the AB-CD extension to 1.2903 so in the event of a breakout above 1.2790, there will be a lot of traders piling in long. The Smart Money cycle bias is long based on current situation and confirmed by the volume last Friday before the price actually started moving as analyzed during Friday's webinar. 

EU long levels: 1.2700, 1.2681, 1.2658, 1.2640, 1.2603, 1.2568, 1.2500

EU short levels: 1.2800, 1.2825, 1.2850, 1.2870, 1.2900, 1.2925

GU Analysis:

GU: Day- The candle is a below average spread (73pips) bull small body spinning top closing on high vol>1day. The candle close and volume suggests more downside. Demand: Weekly/Daily:  1.5900, 1.5850 Supply: Short term: 1.6400, 1.6492, 1.6523 Nothing has really changed yet and it is probably because of the upcoming UK news at 4.30am EST today. We will probably see SM position price prior to the release against the intended direction or spike prices to those levels during the news and then reverse. The levels of interest remain more or less the same for the trades whether long or short. Having said that, the likelihood is for a news move down as the vehicle for SM to collect orders below, particularly if they test the 1.5950 level. A firm close below this level will see price going downward to test the 1.5853 pivot.  

GU long levels: 1.6007, 1.5950, 1.5870, 1.5853 
GU short levels: 1.6225, 1.6400, 1.6492, 1.6523 

Posted at 01.21 am EST