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