EUR/USD, GBP/USD Analysis March 18, 2013
Of course regarding the Cyprus bail out fix I expected a gap open today but to be honest I wasnt expecting it to be over 150 pips on the EUR/USD and an astounding 300+ on the EUR/JPY. Crazy I tell you.
Could this be the start of Europe imploding? It sure could. As I was reading articles over the weekend on the issue the consensus was mixed and I understand why. Just to give a short summary. The IMF and EU decided to tap Cyprus depositors and charge a tax on savings deposits. The reason is Cyprus is a known place where Russian dirty money has been stashed for years and the last thing they wanted was to be seen as bailing out the Russian mob. However hitting all depositors really seemed kind of stupid if you ask me. One could easily say they were between a rock and a hard place.
The aid package including this raid on depositors hasn’t been passed by the government due to lack of support so they have called for a bank holiday until it does. Its either this or the government says that 2 of the countries largest banks will be bankrupt Tuesday morning. What will they do? Its anybodies guess at this point. I would assume that there are politicians that are tied to this Russian money in some way and they will block the process. But what is the alternative? Let the banks go down in flames would be my opinion. Then let the Russian mob deal with the guys in charge since nobody will throw these guys in jail. They may actually volunteer to sit in a cell since that would be the lesser punishment, rather than getting a Colombian neck tie Russian style.
Looking at the chart alone I see nothing but a mess. To think a gap like this will close is not likely and will depend on if they do any back peddling on Cyprus and it dont look like they will.
With a 44 pip Asian range already this morning I will be looking for the manipulation at its highs today. If these highs cant hold and show something clear to trade the 1.2942 level is next in line and then 1.2977.
The GBP/USD is definitely the cleaner pair to trade today. The price action clearly says the reversal has the highest probability today. We have 3 clear pushes up and a head and shoulders pattern typical of the reversal. Not to mention the daily pin bar Friday.
With the 60 pip Asian range already we may not see the Asian highs during London today but that will be my preferred entry point. Otherwise the 1.5100 psych level is an option with clear manipulation but it will have to be rather clear to be shorting from there. There is a good chance these pairs will run off with out me today but its better to be safe on a day like today.
Forex News Today
There is no significant news to watch today. At this point they will be watching what happens in Cyprus and other developments happening around the Euro Zone. It seems a wealth tax is in the works which wont bode well for the banks. We could start to see the beginnings of bank runs all over Europe today or this week. I have my doubts but anything is possible when people start to panic.
If you have questions about joining Day Trading Forex Live and becoming an active member please feel free to contact Robin Haywood. He is a current member and has volunteered to answer any questions to give you an idea of what the service involves and support we provide.
You can email him at email@example.com to set up a time for a conversation over the phone if you like or call his US phone line at 702-560-8552 or Skype at RobinHaywood
Do You Enjoy The Daily Forex Commentary? Please Click The Like Buttons, Tweet It, and Google + It Below !!