August 23, 2013 Daily EUR/USD, GBP/USD Analysis
The EUR/USD tried to make the push down we were expecting yesterday, however the support on the daily chart was enough for them to try and push out any weak holders. I will still be expecting the next push down today and will reconsider my bias. There is a good chance we see the chop on Friday flows today but there is enough news that they may make the break.
Since we are still in a first push situation I will be open for the long but will want to see some conviction upward to be convinced. With the lows rather far taking a long during London is not likely without the conviction close above yesterdays highs. This could be reasonable with a push down during London and seeing trapping during the New York session if they wont let the lows break again. However I will be happier with a short today since the lows have been pounded lately and the more they do the higher the chance of the next test breaking.
The best levels for a short range between the 1.3360 mentioned in yesterdays commentary and the highs at 1.3372. The reason is that even though its out of context the topping formation has a good chance of holding and we actually see the second push today. They may want to take stops above yesterdays highs and push more weak holders out of the market but the way it looks as though they wouldn’t let price break above the highs during the London session they may have gotten all the orders needed taking stops above there.
The GBP/USD continued the conviction to the downside yesterday stopping at a daily breakout level at 1.5571 before going into the chop for the rest of the day. I will still be bias for the next push but the same applies being Friday so it may not go off until next week. Having said that the probability still is we will see the next push down. There is a small chance it will give a stop run to the lows for a long but the setup will need to be clear to change my bias. If its nice the entry I will want will be as close to the lows as possible so I can close with a smaller loss if it gets the hourly close below yesterdays low. The entry I prefer is the short and the best level I see is 1.5606 where we have proven resistance. The only problem is that with the 2 levels just above at 1.5612 and 1.5621, if they cant get orders stacked enough at 1.5606 they will push higher to get them.
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Forex News Today
The only major news scheduled during the London session is UK GDP figures. I don’t really expect much from this barring a large miss and I doubt that will happen. There is German GDP at the beginning of the Frankfurt open so be careful of any miss there to give them a reason to manipulate.
The US has New Home Sales and I would expect a large miss to create much movement here also. Housing data has been improving but more than likely for reasons other than the American consumer coming back into the market. Therefore if the miss is down it should get a bigger reaction than a miss upwards.
Have a great weekend
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