DAILY REVIEW 15 October 2014

EU Analysis:

EU: Daily- The daily candle is a large spread (128pips) bear closing near the low on very high vol>2days. The candle close and volumes suggests more downside. 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: The fundamental weakness of the Euro vs the FED's reluctance to commit to rate hikes has stopped the fall of EU dead in its tracks. Taking a closer look at the daily volume, the increase in volume has not resulted in a proportionate spread yesterday, this would suggest price is starting to become compressed and may reverse. Price made a new low in Asia to 1.2624 and SM is likely to maintain selling pressure to test the 1.2604 pivot or lower to the next pivot at 1.2583 before reversing.

EU long levels: 1.2624, 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 very large spread (199pips) bear closing at the low on very high vol>2 days. The candle close and volume suggests more downside. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6400, 1.6492, 1.6523 The poor UK data yesterday caused prices to tank straight into the daily demand zone. Yesterday I wrote "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" and this is exactly what happened. Having taken out the 1.5900 key level and made a lower low in Asia, SM is likely to test the 1.5853 pivot as a possible reversal level, the upcoming UK news will likely be the catalyst. Any close below this level will likely see prices going further down.  

GU long levels: 1.5853 
GU short levels: 1.6225, 1.6400, 1.6492, 1.6523 

Posted at 04.14 am EST