Equities Get Respite At Monthly Lows March 27, 2015
USD Strength Returns With An Equities Bounce From March Lows
US stocks had a nice bounce off the March lows yesterday but to be honest I don’t see much conviction in the move that would convince me they will be pushing higher. It is certainly possible as we approach the end of the month but will remain to be seen today. If the US GDP data later in the NY session does at least come in as expected then the USD strength should continue but considering the Fed lowered their forecast for GDP its questionable to say the least.
On a side note I did find the Thursday Keiser Report interesting along with one of those fun facts I saw yesterday in an article I read. As Stacy and Max discuss the dire straits the US infrastructure is and then move on to the prison industrial complex keep in mind the fact that although the US has around 5% of the world population they also have 25% of the worlds jailed population. And just to add a little humor (even if its not really that funny) you would never guess who owns most of the prison system in California. None other than Bob Barker. Yes because The Price Was Right 🙂
EUR/USD Runs Stops To The Highs before Closing On Lows
Since we have a clean push down along with the stop run to the highs on the EUR/USD today I will be bias for the short going into the London session. The best level for the test is up at 1.0900 but since the Asian range is already sizable we may only see the dip below the yesterdays low and a backside entry for the short. I am open for the long but they will need to show me enough to change the short bias after London opens.
GBP/USD Runs First Push As Well
The GBP/USD also ran a first push to the downside but also showing some potential bottoming after hitting stops to the range lows. The little bit of conviction below Wednesdays lows are a good sign but I prefer to see them show the hourly close below the pin to be all that convinced. Having said that I will still have the short bias but slightly more open for the long if they manage to run stops to yesterdays lows. The best level to short will be the Asian highs at 1.4867 preferably with a stop run to grab the breakout traders.
EUR/JPY Runs Two Normal Pushes Well Short of ADR
The EUR/JPY running pushes well short of the ADR is usually concerning but with the recent tightening of the range I will expect the third push today. The pins to the lows do indicate that they may push higher before a drop but first I will be looking for the 129.85 to hold during the London session. Otherwise they may push it up to test the 130.24 level before a turn.
Forex News Today
The calendar during the London session is slow other than a Mark Carney speech. I doubt he will be tooting the rate hike horn but its surely possible considering he has had other BOE members talking it up as of late. There is also another BOE member speaking a bit later to keep an eye on as well.
The US has a Fed member Fischer speech a couple hours before the GDP figures that could get them started pushing the USD around. GDP is expected to improve to 2.4% but considering the Fed recently lowering their growth expectations that may not happen. However knowing how the Fed gets it wrong most often I guess there is a chance but considering they are mostly off being optimistic, that is something to think about.
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