EUR/USD, GBP/USD Daily Analysis April 18, 2013
Its been a long time since we have seen such a yo-yo market with a 180 pip push one day and a 200 pip push in the opposite direction the next. Looking at the daily chart you will see what I mean with the beautiful set of daily legs. At this point I will be treating the EUR/USD as having seen the false push to the upside and have a small bias for the push down today. I would be more convinced if we saw the daily close below Tuesdays lows. It is clear they were willing to push it below the lows but closing below on the daily scale shows more conviction so I will be open for the long on a clear stop run to the lows but would be happier taking the short on some manipulation around 1.3047 or the hourly 200 EMA at 1.3057
I also want to point out that there was an aggressive entry for the short around the highs yesterday that I didn’t take. Mainly because my plan involves needing clear signals to trade against a first push. The patterns where there however the stop run to the highs did not. They only managed the stop run above the Asian high to test the Tuesday high and off she went. Some of our more aggressive members may have caught this move but I find that taking aggressive entries in current market conditions carry considerably more risk than they did not too long ago. I will cover this in the live London session today and the reasons why I passed on the entry.
The GBP/USD not only retraced the inefficient move mentioned in yesterdays commentary but blew pats it like it wasn’t even there pushing and closing below Tuesdays lows. This is the pair I will watching most today with a stronger bias for the next push down. The level I think has the most potential is the proven resistance at the 4 hour 200 EMA but it doe have potential to test up into the break out area at 1.5271 so I will want to see the clear manipulation and get a good entry.
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Forex News Today
The calendar starts off with UK Retail Sales. What gets me about this piece of data is how in the heck they could think we would believe that last month could have a 2.1% rise only to fall to below what was actually expected this month. Either the British people are freakishly buying one month and then all staying home the next or there is something going on with how they are fudging the data to get a market reaction. Most likely the latter since I do know several Brits and most all have told me the situation on the street is dismal at best.
The Euro Zone has a few bond auctions with the most important being a 10yr Spanish auction. My thoughts are this will be picked up as usual but if it don’t go off well the Euro will weaken.
The US has Thursday Unemployment Claims expected to rise slightly and as usual if we see a surprise increase the most likely thoughts will be more QE but with the comments coming from Yellen Tuesday these thoughts could be subdued and we not see much reaction at all. Of course if we get a drop it will be USD positive but the probability of that is low I think.
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