Daily Analysis of EUR/USD, GBP/USD May 16, 2013
The EUR/USD gave us the second push we expected in yesterdays commentary and we will be expecting the third today. Since they rarely if ever do the same thing twice my thoughts are the best level they will use is at 1.2912. Its entirely possible they run off from the Asian highs again today but it is unlikely.
Since I didn’t get the entry during the London session yesterday I did manage to take the short during the New York session. However when I woke up this morning I had been hit break even. I also took the GBP/USD short during the NY session and that one managed to get me 50 pips while I slept so not a bad day. That made up for the little fender bender I got into at the local convenience store when a lady seemingly driving for her first time backed into our car while I was in the store.
The GBP/USD has given a nice bottoming formation now so the reversal has a little more potential but this could easily just be the daily support reaction at 1.5195 so I will be open for either direction on this pair today. The best level to short from is yesterdays highs of 1.5271 but there is a possibility for the Asian highs to hold. If I do take the short there I will want to see them play the breakout traders to the Asian lows first then get them at the highs with some clear trapping formations. Otherwise I will consider the long from the 1.5195 level but would prefer a stop run below yesterdays lows of 1.5172. If I do see the hourly conviction close below the daily support I will be more focused on a short.
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Forex News Today
The London session scheduled releases are light with only CPI data from the Euro Zone. This will most likely be a non event since inflation data has been mostly ignored lately.
The US has their weekly Unemployment Claims expected to increase by 7K and as usual if we get the surprise upward it will be USD negative depending on how big it is. At the same time they release CPI data and as its getting closer to the 2% level on the yearly figures we will start to get more reaction to this if that level is breeched and will be USD positive. There is also a few Fed members speaking so keep an eye out for the tape bombs on that. They aren’t the dovish ones so we probably wont get much but just be aware. Later is the Philly Fed Index expected to improve and if it misses to the downside it will be USD negative while a miss to the upside positive.
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