DAILY REVIEW 3 October 2014

EU Analysis:

EU: Daily- The candle is a normal spread (85pips) bull closing 1/3 off the high on very high vol>304days. The candle close and volume suggests more downside after absorption of buying pressure. Levels of interest: Demand: short-term 1.2570 Daily/Weekly: 1.2034 Supply: short-term: 1.2715, 1.2740 (monthly ema200), 1.2790, 1.2800, 1.2820, 1.2840. Background: As we approach the NFP release today, we must be mindful that the expectation is for a poor number that weakens the USD. However, we have to note that ECB will be implementing more QE. The combination of the fundamentals with the German Bond yields and the ECB QE will likely further weaken the Euro. We can expect whipsaw during NFP as SM will likely push back to test the 1.2700 level or higher before reversing back down.

EU long levels: 1.2570, 1.2034

EU short levels: 1.2715, 1.2740, 1.2790, 1.2800, 1.2820, 1.2840

Posted at 07.38 am EST