EUR/USD, GBP/USD Daily Analysis August 21, 2013
Looking at the price action on the EUR/USD we have a clear first push up. The possibility it is actually a second is there but as most members know I have less faith in a continuing push after they go into a chop for two days. It shows a lack of conviction but either way I will be looking for the next push up today. Having said that it also seems as though they were pricing in a “NO TAPER” move from the Fed Meeting Minutes today or more than likely someone accidentally sent it out again. My thoughts are we will see more of the same rhetoric on how they would like to taper but the data don’t back it so we will get more of the same.
Even though I am not treating this as a second push I do think the probability for a short is low but will be open for it with a clean stop run to the highs during London today. Since the daily chart did close above the previous highs by only a pip or so I don’t consider that much conviction on a daily scale. So the stop run is still possible for a decent trade on the pullback. I wont be holding for more than twice my risk if I do get the entry I want. Otherwise the long has the best potential. As it stands right now the best level for the long is at the psych 1.3400 which is also a daily high back on the 8th. It could stop as high as the Asian lows here but I will expect a test of the highs during London first. Lastly I should also warn that during the news release it has a very good chance of popping as low as 1.3373 where we have proven support at the daily highs. However be careful during the news.
The GBP/USD has had another short push upward but I still cant justify calling it conviction so I will be keeping an open mind on this pair again today. I expect if the Euro makes another move up it will drag the GBP with it on USD weakness and it will be a more significant move with the news today. I will be open for the short as with the Euro on a stop run to the highs but considering the news today I expect more of a pullback before they push it long. The best level I see is the 1.5636 area but with it being so close to current price the pullback has a good chance of running as low as the daily lows around 1.5600.
On a side note the pending order I had get hit just as the live London session was closing yesterday came back and took me out for a 5 pip hit during the US session. I did reenter at 1.5681 short during the US session and held it over night moving my stop to break even this morning. My take profit is just above yesterdays lows and its looking like they may just give up the 50 pips. We will see.
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Forex News Today
The only significant news releases come from the US today starting with Existing Home Sales which with a big miss will give them reason to manipulate but I have my doubts there will be much until later in the day when the Fed Meeting Minutes get released. This will most likely cause a rapid chop so be careful if you are in or take the safer route and get out a few minutes before the release.
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