Daily Analysis of EUR/USD, GBP/USD November 28, 2013
The price action on the EUR/USD yesterday is definitely not showing much conviction for breaking the daily highs at 1.3578 even though for most of the day price was above it. The daily close right there and the large pin bar on the daily chart does raise the probability for the reversal. However its not enough to have a clear bias for the day so I will be keeping an open mind on direction with a slight bias for the short. Price has only been in the chop for a day and we haven’t seen the clear reversal yet so all things added up the higher probability is for the short. I will be open for the long at yesterdays lows but it will take some convincing price action to build a bias for the move up.
The other way to look at it is we have an extended push now but that means counting the shy, 80 pip run and we could see either another push or the reversal. What will solidify my bias for the short will be the hourly close below yesterdays lows at 1.3557. Then I will look for the manipulation at the Asian highs or just a little higher at the proven resistance at 1.3588. If they don’t stop it there they will likely test 1.3600 again or the overall highs since yesterdays move was so small.
With Thanksgiving in the US today I will be looking to enter as early as possible in the London session and if I don’t get an entry I will just leave the charts and take the rest of the day off. The probability of a move during the NY session is low and if they do push it on low volume it could be a large move real fast so taking entries is too risky.
The GBP/USD can also be looked at two ways in that we have two intraday pushes up or a first long term push out of the chop. The higher probability is usually the long term push and on a day like today it is best to have the smaller bias for the long while open for the short from yesterdays highs with the right price action. It did move up to the next daily level at 1.6300 and closed below it so they may just hold it here for today. Having said that we do have a BOE Gov Carney Speech today so he could easily rock the boat a bit if he hints at more Asset Purchases.
The best level for the long will be around 1.6264 but if they really want stops they will run it down to test the daily level at 1.6247. Otherwise if we get the wide Asian range the Asian session lows come into play. The only place I will consider the short is at yesterdays highs with some clear trapping while watching for the conviction upwards if I do take a short. Again we have the slight bias for these pairs going the opposite direction so I will be cautious.
Forex News Today
The only significant releases are the BOE Financial Stability Report accompanied by the Gov. Carney speech along with a Italian 10yr bond auction. I somewhat expect both to be non events since Carney had a speech the other day and didn’t surprise much and the auction should go well but if it dont the Euro will likely drop.
Happy Trading and Happy Thanksgiving to all the American readers.
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