Daily Analysis of EUR/USD, GBP/USD September 20, 2013
The EUR/USD tried to make the next push to the upside yesterday but the conviction proved to not really be there with the run down for 50+ pips from the highs. With today being Friday I expect since the euphoria of buy everything not nailed down mantra has faded and we will see the Friday flows carry this pair downward to at least try and soak up some of the inefficient move Wednesday. I doubt any of the big boys will be wanting to be holding over the weekend and be booking profits.
The best level I see to be taking the short during London is at 1.3555 or just a bit higher at the overall highs of 1.3567. I would prefer the stop run to the highs but if I am correct regarding the Friday flows and profit taking it may not get there. I will consider the highs Wednesday as a potential short too but only if we get a push down during Asia or a conviction close below the New York lows of 1.3507 during the London session. I am not totally disregarding the potential long with a stop run to the lows but the probability is low and it will need to be a great setup and entry.
The GBP/USD has shown a clear intraday push to the downside giving me a bias for the short today which is also inline with the closing of the inefficient move and Friday flows. It also has a clean set of three short term intraday pushes from the highs showing the chance of this going for the second push is the best probability. The best level right now is the breakout from 1.6061 but I will be cautious there since there has not been a test yet. The one a bit higher at 1.6093 is slightly better with the proven selling at the level but the problem is its almost 60 pips away from current price and may not get there. Therefore I will also be keeping an eye on the psych 1.6080 level since we know how the GU likes them psych levels. The chance for the long with this being a false push is there but the probability is low so just like the EU I will need something almost screaming at me to take the long.
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Forex News Today
The economic calendar is rather bare today so the higher probability is we will see the end of week flows move price today. There is a Fed member Bullard speaking at the end of the day but that will be after I am in bed for the night. If your in a trade just be aware of that and either exit before or at least move the stop to break even and open up the take profit to maximize gains. My thoughts he will do a little damage control but how the big boys take it is a different story.
Have a great weekend
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