My trade plan for the Euro yesterday played off almost exactly as expected. It didnt give me the manipulation at the point I was most happy with and I had a feeling I might have to take a more aggressive entry. Of which I was prepared to do considering the 2nd push trades have the highest probability and the fundamentals agreed with direction. I just knew that it would be a great day for a nice trade. Bummer is I missed my entry as I was having problems opening our live forex training room and wasnt watching my charts. To be perfectly honest as the 9:45 candle (marked below) was getting within a minute or two of closing I dismissed it as I was pretty sure it wasnt going to close like I wanted and was expecting it to do the stop run above the Asian range. I thought I had plenty of time. By the time I did look back at the chart several minutes later I saw it did give a decent close and had already given me the pullback to the price I wanted (1.2534) and was already moving off far enough that I would have been chasing it and if it did want to do a stop run above Asia it would have got me. Oh well on to the next trade. What did give me some comfort is that we did have some members that took the trade and made some nice pips. Good job guys
As for today we have seen the 3rd push and are expecting a reversal at this point. I do have my doubts that it will be a full reversal of the last move but we should be in for a decent retracement that we can make some pips on. I just wont be holding it for an extended time. Today is also NFP day and the chance for a disappointment is there.Iif that does happen the move up will be longer. I will be looking for some market manipulation at yesterdays low which also coincides with a daily low from the end of may where this short bull run started. Otherwise any clear trap move below that level at 1.2360 will be a good place for a long. The wild card today is of course NFP. If by some miracle it does surprise to the upside we will see the Euro drop for a fourth push down as hopes for QE3 are dashed.
The GBP/USD is in a different situation having seen the 2nd long term push to the downside that I mentioned in the July 5 fx commentary. Today I will be expecting the third which is odd to be expecting the Euro to go up and the GBP to be going down I know but it does happen. The way I see it is that we will either see the Euro will go into a 3rd push chop for the next day or so while the GBP/USD makes its 3rd push down. Or the GBP/USD will have a deeper pullback before it makes its 3rd push while the Euro attempts its reversal. My opinion is the latter is more likely.
Forex News Today
Early in the day we dont have much high impact news. There is PPI Input from the UK that is expected to improve slightly but still be negative figures. barring any surprise I dont think this will be much of a market mover.
Later there is German Industrial Production that is expected to get into positive territory. However last month we did have a major disappointment with this release so there is potential for the same this time. I have doubts it will miss by as much but the potential is there.
Last but not least the US Non-Farm Employment Change and Unemployment Rate with expectations of a lowly 97K. With last months big disappointment I think they are setting the bar lower this time so if there is a miss to the downside it wont be such a grand miss like last month. Otherwise there is nothing that has led me to believe that the release should be better than expected so I am more inclined to thing it will be more inline or miss slightly to the downside. Not that these figures are anywhere close to accurate but its what we have.
The unemployment rate is expected to hold steady and I dont see any reason for that to surprise.
Have a great weekend
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