April 3, 2013 EUR/USD, GBP/USD Analysis
The EUR/USD has not gotten any clearer today with only having the beginnings of a push to the downside. I will be so much happier when this thing can break in a direction. I don’t even care which way but showing us some sort of direction would be nice. Again the only way to trade this is to watch for the manipulation at high probability areas which are the Asian highs we have formed so far today at 1.2826. If it can manage a push above that area it will most likely test the 1.2842 area. having said that I would prefer an hourly close during London below yesterdays low and then a test of the Asian highs. I will be open for the long at yesterdays lows of 1.2808 but will be keeping an eye on the psych 1.2800 level also. On Friday last week and Monday we did see significant support around that level so the stop run below 1.2808 will need to be deep and I would rather see stops taken below the 1.2800 in order to be confident in the move up.
Update: Both the EUR/USD and GBP/USD have had a break to the downside while I was typing this so now yesterdays lows come into play as a probable manipulation level.
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The GBP/USD is clearer showing a first long term push to the downside yesterday. The problem with this pair is the high probability levels are not so clear to take an entry from. With such a large move down I would normally expect a deeper pullback before the continuation. The best level I see is where the 200 EMAs on the hourly and 15 minute charts are coming together. Seen at the blue and orange lines. However that level is over 50 pips away and it dont seem that Asia has an appetite to start the accumulation that could potentially drive it there. The next closer level is the 1.5123 level where it has some proven resistance during the end of the US session yesterday so I will consider a short there with a clear set up. It has the 20 level working for it but if we get the hourly close above it during London today the probability is we will see it push higher. I will also consider the short from the Asian highs if it cant manage an attempt at the pullback but I will want to see the push down during Asia first. The only way I will consider trading against this first push is a clear stop run to the lows of 1.5092. The psych level of 1.5100 may hold but they may want to do a stop run below those lows so I will want an entry that gets my stop well below them.
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Forex News Today
The scheduled releases are light during the London session today with only the UK Construction PMI figures. expectations are for an improvement. In my mind this leaves the potential for a disappointment a higher probability. If so we will see more GBP weakness.
Later is the US ADP Non Farm Payroll figures. Expecting a slight improvement but will only create some movement if its a larger miss. With the bigger NFP on Friday this always has a smaller reaction unless the miss is big.
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