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Daily Forex Market Commentary EUR/USD, GBP/USD, EUR/JPY May 17,2012

Hello all

Its looking like we may be getting a turn around from the drop into the abyss. The EUR/USD is showing a nice looking bottoming formation and does show more potential for a long position today. After several pushes down over the last 2 weeks its looking like we can now get a decent pullback. At least enough that we can make some decent pips on anyway. I still dont think there will be a trend change but anything is possible. So why now? The answer is Bernanke has reiterated that he will dump more money on the market should things start to look bad for the US economy. On top of that there has been more pushing on the ECB for more liquidity also. The cracks are forming and something will give in the not so far off future. My thoughts are the ECB will give in first since the US data has been rather nice of late and Ben has the upcoming presidential election to think about.

As for today I will stick with the probability of a reversal but keeping an open mind with The EUR/USD. I will be looking for a manipulation move to the downside during the London session for the long but if for some reason we see the market rise through Asia and continue the short after a nice trap move at the highs of the day are a good possibility too. We will have to wait and see.

The GBP/USD is pretty much in the same scenario showing a bottoming formation and shows good prospects for the long position today. It would only make sense to conclude that with the 220 pip move over the last 2 days the SM has caught it up with the drop on the Euro and is ready for some retracement also. I will be looking more at this pair since the UK is in a better position than the EZ and has more potential for the larger move.

The EUR/JPY looks most interesting today with also having multiple pushes down along with the Euro it seems ready for a pullback of sorts too. Considering the USD/JPY has been showing strength as of late this pair has the possibility for a larger move to the upside. The only problem I see is that if the market simply rides on USD weakness due to Bernanke talking of printing more money then the USD/JPY will suffer and the EUR/JPY will be the slower mover. Having said that my thoughts are that we will see a risk on move in the short term and the USD/JPY will rise along with the Euro and the EUR/JPY will have the larger move. Of course I will be looking for that sure sign of manipulation in the live room today and go from there.

Forex News Today

Scheduled releases during the London session are light due to the Swiss, French and German banks being on holiday today. There is only some UK MPC member speak from Weale around the start of the US session

From the US we do have Unemployment Claims, Philly Fed Manufacturing Index, CB Leading Index and some Tim Geithner speak. The big ones will be the Unemployment numbers and  Philly Fed. If Unemployment claims has a large surprise there will definitely be an opportunity for the SM to manipulate so if I am around and trading at that time thats what I will be watching for. With the Empire State Mfg surprise recently the Philly Fed has a good chance to do the same. Its expected to rise form 8.5 to 10.3 so any large surprise to the upside will most likely create some decoupling thoughts again and the USD will strengthen across the board. Considering all this and the bottoming formations we have on the GBP/USD and EUR/USD we may have a choppy day ahead so be careful out there.

Lets Talk Manipulation

Anybody who doubts that the markets are manipulated should be sure of this now considering the market reaction to the BOE Inflation Report yesterday. What a joke! I was wondering why the good news from UK unemployment got such a muted market reaction. That was a surprise of around 18K for the Claimant count and a .2% drop in the unemployment rate which should have had a much better reaction than it did for sure. We have to consider that some of that could have been workers running out of benefits but to be honest I am not familiar with how the Unemployment system works in the UK. So for argument sake lets just consider the numbers. They were awesome not just good and all the market did was a 20 pip pop and closed a pin bar. Huh?

So OK we have the Inflation report coming up and King speaking right? Thats a good reason for a muted reaction but then look at what happened when the report came out. A crazy spike down 80 pips. So of course I start scouring through the report to see just what the heck was in there to cause such a move and I couldnt find a darn thing. Yea growth forecasts were lowered but only because of concerns over the Euro Zone imploding of which in my mind would not cause the GBP to weaken against the Euro and it did. How does that happen? Manipulation, you guessed it. Then looking at the ensuing price action proves it as price steadily retraced nearly all of that move over the next couple hours. If that wasnt a clear stop run and more likely a trap move to pull in shorts so they can run price up and hit stops today then I should have my head examined hahaha.

From the mouth of babes 

We have all heard this before right? Its simply amazing the simple truths we get from children as the younger they are they are almost guaranteed to never sugar coat the truth and sometimes its brutal. Below is a video from a 12yr old Canadian girl who has enjoying her 15 minutes of fame as she tells it like it is about our current banking system but before you watch it I wanted to post some excerpts from the article by JS Kim because I could not agree more with this guy.

When I was a child my mother, rest her soul, always harped on us about lying and as I grew up I understood why more and more. Eventually I came to realize that there are no worse people in the world than liars. Even a murderer who tells the truth of his actions is better. Before you think Im nuts let me explain. The fact is that the murderer who admits what he has done has a chance for being helped or corrected and if not we have the opportunity to lock him up for life or even put him out of our misery right? However the murderer who lies is doing so because he wants to get away with it and do it again. The liar can never get help and limits societies tools to control him depending on the cunningness of him and his lawyers to get him back out on the streets to do it again. Does that make more sense? Yes it is an extreme example but the way I see it just like Mr Kim here. It is warranted to fully understand what these banking LIARS have been doing to us for the last 100+years.

Here is his view and the link to the full article which is a good read.

I will always have loads more respect for men like Pablo Escobar, “El Chapo” Guzman and “El Señor de los Cielos” Fuentes than any banking executive like Jamie Dimon, Lloyd Blankfein, Ben Bernanke, Mervyn King, Evelyn Rothschild, David Rockefeller, Vikram Pandit et al. For the feeble-minded that will seek to twist these words into an unintended meaning, no, I do not admire or believe that Escobar, Guzman or Fuentes are or were good people. However, I absolutely hold more respect for criminals that are honest enough to be 100% aboveboard about their criminality so that we never mistake or misunderstand their intent versus criminals that deliberately seek to deceive us so that they can utilize our misinformed and ill-gotten trust to enslave us. Even among criminals, a hierarchy of respect exists, as rapists, serial killers, and child molesters are the least respected of criminals within the penitentiary system and the most likely to receive a brutal beating for their sins while incarcerated.

 Lords of brutal drug cartels, when they despise someone, will spit in the face of the person they despise or simply tell that person that he or she will be executed. There is never any doubt about their evil intentions. On the flipside of this coin are the lords of our banking system. Despite being misanthropes, lords of our banking system will smile in our faces, perpetually lie to us about how banking really works, and tell us that they want to help us. However, the second we turn our backs, they will stab us six inches deep in the middle of our backs or deliberately create massive inflation that silently and secretly sentences people to death from starvation. As John Maynard Keynes stated, “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security but [also] at confidence in the equity of the existing distribution of wealth.” Keynes went on to explain, “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic laws on the side of destruction, and does it in a manner which not one in a million is able to diagnose.” For those that have internalized banker-cartel propaganda and still fail to grasp the unquestionable and indisputable immorality of our current banking system, simply put, bankers are the equivalent of modern day slave owners and we are the slaves. We will never have freedom, but only the illusion of freedom sold to us by politicians and bankers, as long as our current fractional reserve banking system persists. This is an indisputable fact that even Central Bankers have admitted from time to time. Remember that the notorious Federal Reserve Chairman Alan Greenspan once stated, “gold and economic freedom are inseparable.”

Happy Trading


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  1. Guy Weston
    Guy Weston May 17, 09:46

    Chad, what timezone are your charts? Could you label them accordingly.

    Reply to this comment
    • Chad
      Chad May 17, 10:15

      Hi Guy

      The day separators are at 5pm EST if that helps at all. When the commentary goes out the Asian box is forming and is several hours before London open so readers can use the information to trade london.

      Reply to this comment

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