Daily EUR/USD, GBP/USD Analysis June 17, 2013
The EUR/USD seems to be in confusion mode giving the intraday push down Friday only to retrace more than half the move during the ate day US pump up. This is normal these days since we do have the Fed Meeting this week. With all the talk of tapering going around it is expected that there will be confusion on the part of the big boys and they will have no commitment on direction until they get the word from Helicopter Ben. The way I see things is since there is no really great data to back up any tapering of the print fest we will get a very similar statement we got at the last meeting. Therefore once its all said and done the Euro will go berserk for awhile and then continue to rise most likely as they front run the money being thrown into the market every week by the Fed. Stocks will continue to rise also but more than likely at a slower pace unless we start getting worse data in which case they will rise faster (the new normal) as they anticipate more purchases or at least the talk of any tapering dies down.
The way I will be looking to trade this today is inside this range and open for direction. The safest place for entries is at the extremes but with a clear set up and good entry I will be willing to take the more aggressive entry inside the range. The best levels to be looking for a long position is the 1.3318 level due to it being proven support and has the psych 20 level just above. It is a less relevant level due to it being after London closed Friday so I will be very cautious there. The better level is the lows Friday where it did find support Thursday also but some caution is warranted there also due to the Thursday lows just below. The same holds true for shorts. We have a good break out level holding during the Asian session this morning. The push above the NY/London overlap is worth noting but has just as much probability of being manipulation as conviction so Im not going to read too much into that but it does give a little more significance to the Asian highs as a level. A clean hourly stop run there with some 15 min manipulation candle patterns there will be good to get short with a good entry. Otherwise if it makes the push above I will consider the same at Fridays highs.
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The GBP/USD is showing something much more interesting with a potential false push down and first push up. I would feel better if price managed to clear the overall highs but will be having a small bias for the long here today. With the gap up almost closed this morning it will be a good area to be looking at what the London boys think of it when they get to business. Otherwise I see the best level for the long at the 1.5700 psych level due to it being a daily high last week that did have a daily close above. Having said that with the Fed this week I would expect we will need some help from the EUR/GBP today if this is going to make a pullback and head into the second push.
I have to admit other than the 1.5700 area the levels are not that great. The 1.5685 has potential but I will be watching for the hourly conviction below to see if they do intend to keep this in the chop until the Fed in the next couple days. If there is that hourly close below 5685 it will need to be convincing in order for me to change my bias to long but anything is possible when we have unclear pushes. I will also be watching the overall highs for the hourly stop run to short from if we don’t see the drop first during London for the entry long but it will need to be very pretty and be a bit more risky. If we do see that I will also want a good entry and watch for the hourly close above solidifying my bias long, close any short if I am in and look for the long on a pullback to either the Asian highs, midrange (if the range is wide enough) or the lows.
Forex News Today
The calendar has almost nothing of note today with the exception of some short term bond auctions from France and the US. I highly doubt these will be of consequence unless they to terribly bad which is unlikely. The US also has the NY Empire State Manufacturing Index which is a medium impact event so barring a very large miss it will be pretty much ignored.
Last Friday I made the analogy of what will be the catalyst for the start of the house of cards falling and of course I am sticking with it but I had a member make a comment that the vested interests will do everything they can to keep this farce alive. Which is true and why its still going on today.
Well I was going through my news sources today and found a couple very interesting videos for you that can offer some hope and the potential miracle we will need to actually get through this with the least amount of pain. The first is a comparison to the roman empire which is startling close to where the US (and the west in general) is at today but there are definitely some differences that are discussed which give some hope to the situation. However it will take these “vested interests” mentioned by Nicholas to come on board and promote these changes which doesn’t seem likely in the near future. Enjoy these and know that there are loads of people out there that agree but in order to promote the change needed there will have to be some pain the vested interests are willing to accept.
I will be trying to make time for this convention next June. I could use a relaxing trip to Vegas. 😉
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