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