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