Daily Analysis of EUR/USD, GBP/USD May 8, 2014
Looking at the movement on the EUR/USD yesterday I can assume rather safely that Janet Yellen didn’t have anything new to say about what the Fed plans for the near future. As I look through my news I see that was the case and today they will most likely wait for the ECB rate decision and Press Conference before they make their move for today. At this point I hope to have a clear entry well before and at least have my stop to break even before Super Mario starts talking.
Considering the non move yesterday I will be more open on direction with a slight bias for the next push up. Since the cycles have been so abnormal as of late the potential for getting the next push up today is there but will likely need help from the ECB later on today. The levels I will be watching will be the 1.3934 for a short or the 1.3905 for a long. However considering how close it is to current price I would prefer to see them push it up a bit further during the Asian session before running it down and taking stops below. Otherwise they could push as low as 1.3888 but I have my doubts they will do that before the ECB news.
The GBP/USD had a similar move as the Euro leaving it open to either direction today also. They did manage to run down to test the 1.6946 level mentioned in yesterdays commentary but did that during the Asian session this morning rather than showing any manipulation for the next push upward yesterday. Again the move on this pair will likely depend on what the ECB does or doesn’t do later today but I will be treating it the same as the Euro with a small bias for the next push up and more open for the short.
The best level I see for a long is the 1.6946 but its proximity to current price concerns me somewhat. If they do break that they will likely push down to 1.6918 and I will consider the long from there. Otherwise the 1.6984 level is the best one I see to consider the short. The 1.6070 is valid but I will need to see a clean set up there to consider the short due to it being around the middle of yesterdays range. That makes an entry there more aggressive with the current conditions we have.
Forex News Today
The news releases are pretty slow until we start getting the Rate Decisions from the BOE and ECB later in the day. Therefor it will likely be a slow moving day more like watching paint dry than good trading. I sure hope Im wrong. There is a small chance the German Industrial Production getting things moving but would take a big surprise and any move most likely wont be sustained.
There is also a couple of Fed member speeches along with Janet Yellen finishing her testimony today. These all have potential to drop tape bombs but considering how they all have been quiet about anything more or less doing their best to keep everybody in the dark. The statements Yellen made yesterday of “the taper will continue as long as the economy improves” and “if the labor market improves then QE will likely end this fall” doesn’t really say much since both the economy and labor market data are so manipulated to show it looks good while neither are actually doing well. Today could be really interesting but most likely very boring.
Asian session traders need to keep an eye on the Chinese CPI data tomorrow. Although its a medium impact event if it misses big to the upside it could have an effect on the Aussie. The probability is low but there.
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