Daily EUR/USD, GBP/USD Analysis June 25, 2013
The EUR/USD looks to be more in a state of confusion this morning with the big boys holding it up rather well yesterday. They just wouldn’t let it break to the downside and have shown us a rather nice bottoming formation. Today the reversal does have a better chance but I will still be cautious. What I will want to see to take the long is a widening of the Asian range this morning along with the hourly close above yesterdays highs. That 4 hour 200 EMA is getting some respect which does concern me somewhat but the hourly close above during London will be a clear signal if it cant do it during Asia.
I suspect they will hold it below this morning since it is yesterdays high also. If that does happen and the Asian range does hold tight I will want to see them play the breakout traders on both sides of the range to take an aggressive long. The fact is the safest trades in this situation are at the extremes which is why if we get the stop run to yesterdays high I will be willing to short with a clean set up and good entry.
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The GBP/USD has made the first intraday push to the upside for the start of the reversal but I am still skeptical since it did make the push down with a couple hourly closes below Fridays lows first and it found some good resistance at the highs during the end of the US session Friday. This tells me the US boys don’t have much conviction in the push up as of yet but its still my bias for the day. Its weak but its there.
The levels I will look for manipulation to go long from are the 1.5414 breakout level or the 1.5396 that coincides with the psych 1.5400. The Asian lows could hold it but with the range still small I will want to see them get the breakout traders to the highs first along with a good pattern and entry. I will also be willing to short from yesterdays highs but I will also need to see something clear to change the small bias I have for the long which is either playing of the breakout traders to the bottom side first and then an hourly stop run to 1.5464 that has some of the candle patterns we look for on the 15 minute chart during that hour.
Scheduled releases are almost non existent during London today. the UK does have Mortgage Approvals today but I highly doubt this will be much of a market mover.
Later the US has Durable Goods data expected to drop slightly. A surprise to the upside should have an impact that will see the USD strengthen as thoughts of Bernanke pulling the punch bowl away come to mind again. A miss down and it may have the opposite effect but it will need to be big in order to create thoughts of him keeping the presses going I think. Later is New Home Sales expected to rise so this could be interesting. Durable Goods should give a clue since a majority of them are household appliances and if it goes well then that increases the chance that the Housing data will too.
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