We did get the 3rd push yesterday as we expected. The question now is will we get the reversal. To be honest I have my doubts unless of course NFP today really disappoints of which I will cover later. The fact is there is a reason why we see extended long term pushes and its because of fundamentals. I know there are those out there that say fundamentals are priced in or they dont matter at all but they are wrong. I will be the first to admit that there is a constant pricing in effect but the fact is the Smart Money can only manipulate price short term and the one thing they will never do is be on the wrong side of the macro picture and in order to see that picture they have to watch the fundamentals.
As I pointed out in the May 31, 2012 commentary we were expecting a pullback and the 3rd push down and the rise should be decent due to month end flows. We got just what we were thinking and the 60+ pip rise from the lows. Some of our more aggressive members took that long during Asia and made some nice pips on it too. Nice trade guys.
During the live training room we did catch the EUR/USD short trade just as we planned and I personally made 60 pips on 2 positions combined but those that held on to the TP should have made the full 70+
The path I will be looking to take for today is keeping my mind open. There will be a slight chance to see the pullback as we can see on the EUR/USD chart below that we may be finding some support at what looks to be a 1 hour stop run during the NY session yesterday so even though I find it tough to pull the trigger on a long position there is a good chance that we get a series of 90 pip chopping days before the next move. So if I were to take the long here I want to see a very nice set up since at any moment we could get more bad news and see the next level down. If we do see an hourly close below Thursdays lows then the possibility of me taking a long today goes down.
The GBP/USD did as expected yesterday also except for the fact it had an extended move. I have been talking about it playing catch up to the large moves in the Euro over the past few weeks and it looks to be getting close. As we see the very clear 3 pushes down marked here now we would normally expect the reversal but it may not happen here either with the USD strength and risk aversion we are seeing in equities right now. We will need some inspirational data from Europe or some nasty data from the US in order to see the change in attitude of investors.
For today I expect this pair to follow the same as the Euro again and will be keeping an open mind and simply looking for the cleanest set ups. Preferably at the lows for a long or a good confluence manipulation trade to short.
Forex News Today
Today we have a busy day with news releases again. The biggie coming from The US.
The EZ only has a couple high impact events starting with Italian Manufacturing PMI then later the Unemployment Rate from the EZ as a whole. I dont expect these to move markets much but if the do surprise to the downside it will be Euro negative.
The UK has their Manufacturing PMI data and is expected to drop below 50 which will be GBP negative showing that purchasing managers see a slow down ahead which contribute to the possibility of more Asset Purchases in the future.
The US starts with the infamous Non-Farm Employment Change and Unemployment Rate coming out at the same time. The expected figures are an increase of 40K jobs created since last months disappointment. With ADP yesterday being a slight disappointment it does have a chance to do the same but I am expecting it to come out close to the 151k. The reason is its still a bit lower than the revised figures from last month but rather close and the ADP figures were not all that far off. If we do get a large drop from the expected release to the tune of 30K then the USD will drop on expectations of the Fed starting up the printing presses. If we do get an as expected figure or better then the USD will continue to rise as hopes for more QE get dashed. If its a large jump up (which I doubt) then there the decoupling theory will kick in and the USD will run wild.
I dont expect a deviation from the Unemployment Rate. There could be a drop like last month as more people are losing their benefits but the chance is low. The next one that has potential to move the markets is ISM Manufacturing PMI which is expected to drop slightly but still is well above the 50 mark so unless it surprises to the downside we probably wont see much from it.
Today I leave you with another entertaining video from Charles Biederman as he goes on yet another rant on the corruption of our governments and bankers committing blatant fraud against their own people. Im starting to think he may want to start a revolution and I have to admit its not a bad idea. It seems like that may be the only course of action we can take to get rid of these guys. Maybe we need to borrow a guillotine from the French? What do you think? Please leave some comments below. I would love to hear your opinions.
Have a great weekend
Chad
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Yes !!!!!!!!!!! Guillotine! he ony way and this is a french which telling you!