DAILY REVIEW 7 October 2014

EU Analysis:

EU: Daily- The candle is a large spread (166pips) bull closing just off the high on high vol>1day. The candle close and volume suggests more upside.  Levels of interest: Demand: short-term 1.2500 Daily/Weekly: 1.2034 Supply: short-term: 1.2600, 1.2615, 1.2634, 1.2661,1.2680,1.2698, 1.2715, 1.2738 (monthly ema200), 1.2790, 1.2800, 1.2820, 1.2840. Background: There is no change in the fundamentals and bias is still for a weaker Euro. Yesterday I wrote "we can expect SM to fade weak shorts and build more short positions before a further downward push" and SM has moved even much more than can reasonably be expected. Whilst we do expect a higher high, the longer term bias is still bearish and taking a long is not the best option. SM are likely to fade weak longs before pushing up to test yesterday's high or higher.

EU long levels: 1.2500, 1.2034

EU short levels: 1.2675, 1.2698, 1.2715, 1.2740, 1.2790, 1.2800, 1.2820, 1.2840

GU Analysis:

GU: Day- The candle is a large spread (145pips) bull closing near the high on low vol<4days. The candle close and volume suggests more upside but on reducing buying pressure. Demand: Weekly/Daily:  1.5900, 1.5850 Supply: Short term: 1.6116, 1.6150, 1.6185, 1.6200, 1.6224 Yesterday saw sudden US Dollar weakness across the board and SM used it to fade weak shorts without even testing the current pivot low. UK news today has been mixed and we can expect to see GU testing the highs and coming back down again. As at the time of writing, prices have already made a higher high than yesterday but SM is likely to maintain buying pressure to retest the high at 1.6116 or higher before reversing back down.

GU long levels: 1.6050, 1.5870 
GU short levels: 1,6116, 1.6150, 1.6161, 1.6185, 1.6200 

Posted at 06.00 am EST