Daily Forex Commentary EUR/USD, GBP/USD September 11, 2012
Today the EUR/USD seems to be hammering out a the third push chop as nobody wants to be the tall blade of grass that gets cut first so we will have to play it safe and trade the range. Right now we are testing the support level I mentioned in the Sept. 10th forex commentary and if we can manage a one hour close below that level during London today I will be looking more for the short. If we see the support level hold and the move back up to the highs I want to see the 1hr stop run up there for the short also. Otherwise any long position I will only consider if this support level hold throughout Asia and we get a clear trapping pattern there. My thoughts are if we do get the break down and manipulation to the upside we will see the larger move down since there is not much support below until we get to the 1.2650 level.
My short from 1.2803 was stopped out break even after moving off 25 pips and even though I had the call right and it eventually moved the 50 pips I was looking for the fact is the smart money couldnt get the orders stacked in their favor enough and had to come back twice before they could make any sort of move. On to the next trade.
The GBP/USD today is looking more like the reversal is coming with a better looking topping formation. There was a decent entry short during the London session for a good 40-45 pips before the New York reversal kicked in but those trades are a bit too aggressive for me and I stayed out. Today I will be looking for the manipulation at yesterdays highs for a short or the lows for the long. In this type of market I prefer to see the 1 hour stop run at those levels but some of the clear candle patterns we look for on the trap will do trading the range today.
Forex News Today
Scheduled news releases are light again today. The only one of significance and high impact is the US Trade Balance late in the day. Any big surprise to the upside will be USD positive as the possibility of exports helping growth comes in but I have my doubts it will be anything big.
The market seems to be waiting for the big decision from the German Court on the legality of the ESM. Everybody keeps up the Euro pump saying that its all but a done deal. However most of what I have been reading says there is a 40% chance they will say its not legal and Germany cannot ratify it. If this does happen the Euro is heading for a big drop.
There is also the big Fed Meeting coming up Friday so we have a high possibility of the markets being choppy the rest of the week. From what I am seeing and I would have to agree that even though as I posted yesterday Bernanke is in between a rock and a hard place if there is the disappointment many are looking for risk will be way off and markets are in for a big correction of these last moves up.
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