DAILY REVIEW 6 November 2014

EU Analysis:

EU: Daily- The candle is a normal spread (109pips) bear closing just off the low on low vol>2days. The candle close and volume suggests more downside. Levels of interest: Demand: short-term 1.2520, 1.2511 Daily/Weekly: 1.2053, 1.2037 Supply: short-term: 1.2576, 1.2600, 1.2645, 1.2675, 1.2700 Background: The USD Index continues to strengthen significantly after the FED's removal of QE plus the BOJ's QE program. Prices appeared to tank yesterday on the poor German data and good US ADP data but stopped short at around the 1.2500 level trapping more short entries as they reversed up from there. Nothing has changed in terms of the order books and SM is likely to use the upcoming ECB rate decision continue to fade weak shorts to around the 1.2600 key level or higher before reversing to resume the downtrend. 

EU long levels: 1.2240, 1.2182, 1.2053, 1.2037

EU short levels: 1.2576, 1.2600, 1.2645, 1.2675, 1.2700

GU Analysis:

GU: Day- The candle is a large spread (152pips) bear hammer closing on low vol>2days. The candle close and volume suggests more upside. Demand: Weekly/Daily:  1.5850 Supply: Short term: 1.6137, 1.6150, 1.6183, 1.6225, 1.6400, 1.6492, 1.6523 Price remains in an inside day (Monday). Price made a new low of 1.5868 and abruptly reversed trapping the short breakout traders. With the UK interest rate decision out later, it looks like SM is positioning prices and may use the news release to clear weak weak shorts to 1.6037 level or higher to 1.6100 before reversing to test the current low. Note that GU may find demand again back at the current swing low 1.5874 to the 1.5853 pivot.

GU long levels: 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 3.57 am EST