DAILY REVIEW 31 October 2014

GENERAL NOTE: Today is the last trading day of the month and also a Friday, the last trading day of the week. SM will need to book profits and likely take new positions prior to Monday. You can expect volatility as SM may whipsaw prices up and down to achieve their objectives to close out the month.

EU Analysis:

EU: Daily- The candle is a normal spread (92pips) bear hammer closing on very high vol>9days. The candle close and volume suggests buying and possibly more downside. Levels of interest: Demand: 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2645, 1.2694, 1.2695 Background: The FED's decision to remove QE after 6 years coupled with Euro weakness means continued strengthening of the USD. Prices pulled back somewhat at the 88.6% yesterday as SM spiked the level during the US news release trapping weak shorts and taking them out before resuming the downward move today. The Oanda oreder book shows the potential stack of orders at the 1.2625 - 1.2660 level where price might potentially stall. Potential structure high is 1.2631. Price has already made a lower lows today 1.2540 SM looks to have trapped weak breaout short traders and is likely to fade them to around the 1.2631 level or higher before reversing to continue the downtrend. 

EU long levels: 1.2535, 1.2500

EU short levels: 1.2631, 1.2645, 1.2694, 1.2695

GU Analysis:

GU: Day- The candle is a normal spread (87pips) bear small body spinning top closing on low vol>6days. The candle close and volume suggests buying and more downside. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6137, 1.6150, 1.6183, 1.6225, 1.6400, 1.6492, 1.6523 Oanda order book shows possible stackes at 1.6000, 1.6025 and 1.6050 (peak). Prices have not gone lower yet but SM is likely to fade weak shorts to around 1.6037 or higher before reversing to continue the downward move to test the pivot low 1.5874 on its way to 1.5853. Note that GU may find demand again back at the current swing low 1.5874 to the 1.5853 pivot.

GU long levels: 1.6120, 1.6105, 1.6081, 1.6063, 1.5853 
GU short levels: 1.6037, 1.6060, 1.6082, 1.6100, 1.6121, 1.6150, 1.6183, 1.6225, 1.6286

Posted at 5.05 am EST