April 8, 2013 EUR/USD, GBP/USD Analysis
Here we are starting a new week after the most dismal NFP print in 9 months but hey Unemployment went down right. Well yes it did and I should also point out the revisions to the upside for January and February but there is something we have to look at the fine print for. Which says that the workforce participation rate in the is at lows not seen since the 1970s. Holy crap what a great recovery we are having. The fat is if we include those not in the workforce anymore the real unemployment rate is north of 20% in the US. Back when these folks were counted as unemployed as they should be was the 1930s depression and the high was 25% if I remember correctly. I will say it again. Man this is a great recovery.
Im not going to beat the dead horse here as I have said many times that the fix involves getting back to a true form of capitalism rather than the crony capitalism we have. I will point to a video I posted a link to back at the beginning of the year because it has been increasingly being noticed with the parallels to the fall of the Roman Empire. Its actually scary close. Here is the link to my January 1st commentary with the link to the video.
Also check out this article on Zero Hedge this morning that outlines the same thing.
The EUR/USD today looks to be in for a possible reversal. It found some stiff resistance at the daily 200 EMA Friday and has a somewhat clean 3 pushes to the upside. I am concerned that the accumulation between the first 2 pushes is quite small so I will be open for the long also. The best way to treat this is an open bias and look for the manipulation at the key levels today. The proven resistance at the Asian highs does look tempting but the safest short will be from a stop run to Fridays highs of 1.3039. Otherwise a long position would be cleanest at the breakout of Thursdays highs of 1.2948. The issue with these levels is they are far current price so I will be looking at the levels created during Asia and watch how they play the breakout traders today looking for the manipulation at either end of the Asian range but I will be looking to see some good confluence along with the manipulation candle patterns o enter a trade.
The GBP/USD has a similar 300+ pip move over 2 days but has absolutely no accumulation showing a possible 3 pushes. this pair is tougher to call a direction and the cleaner way to look at it a bias to the upside. If this does happen it will drag the EUR/USD with it most likely. However the 300+ pip move seems over extended so I will be looking for the long at the price it gapped to this morning around 1.5303. I will be keeping my mind open for the short but would prefer a stop run to the highs of the Asian session or even better the overall highs of 1.5362.
Having said that I will also mention that including the gap on both pairs the Asian range is larger than normal already and with that I will be considering entering with clear manipulation to the levels generated during Asia. Right now the candle patterns on the GBP/USD are showing they are manipulating for the short so if I see more of the same candle patterns at those levels during London I will consider the short from those with a good setup and entry.
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Forex News Today
The calendar is light today until we have helicopter Ben speaking late in the day. There is German Industrial Production during the London session but without a surprise I doubt this will have much effect. Its expected to rise slightly and considering German data as of late has been positive this may surprise a bit but I have my doubts it will be big enough to cause a sustained move.
Be careful if you are short the EUR/USD when Bernanke speaks. I doubt anything he says will be USD positive.
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