Daily EUR/USD, GBP/USD Analysis February 12, 2014
With the Janet Yellen testimony rather uneventful yesterday, more or less playing both sides of the fence saying she intends to keep the taper going. On the other hand she also said the labor market has a long way to go and will continue monitoring and play it by ear so to speak. In other words she towed the party line admitting that things are not so great with the US recovery while at the same time holding with the intention of tapering the bond purchases. Good job Janet, the markets didn’t collapse due to your first speech as Fed Chairman.
The EUR/USD today has gone into the third push chop with the last push being a shorty as I mentioned in yesterdays commentary. At this point it has done a 50 pip reversal so it could go either direction from here. Right now yesterdays lows are holding during the Asian session but looking to break down as I type. As long as it holds it is valid for a long during the London session but I would like to se it test upward first widening the Asian range somewhat. The better place for the long is at the 1.3613 level where the four hour 200 EMA is sitting and the lower end of the third push. If I get an entry long I will be watching for the conviction downward and exit and look for the short. When considering any short positions, the highs will be the best place but we may not see price reach there if they do intend on pushing down today. Therefore I will also consider the short after some conviction below the 1.3613 level and then pullback to yesterdays low or the Asian highs at 1.3639 this morning.
The GBP/USD has made its next push to the upside into the daily 1.6480 level. I will have a bias for the next push to the upside today. The best level I see for the long 1.6430 but with it being in close proximity to current price they may push it to 1.6420 before the turn. The next significant daily level is over 100 pips away from current price but if I can catch the long from around 1.6420 then it does have potential to stop at a lower daily level at 1.6529 just below where the ADR is sitting right now.
Forex News Today
There aren’t any significant data releases today other than Swiss CPI so those who trade the Swissy should keep an eye on that. Otherwise the day is littered with Central Bank speeches starting with the BOE Inflation report and the eventual Carney speech. This should be good for the GBP with all the nice data lately. Later Super Mario from the ECB takes his chance to weaken the Euro more I would assume but one never knows. About an hour and a half before Draghis speech there is Fed Member Bullard throwing in his two cents worth but as long as he doesn’t deviate real far from what Janet said yesterday then it will probably be a non event.
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