EUR/USD, GBP/USD Daily Analysis May 3, 2013
We have our first push down as expected thanks to Super Mario. I was rather impressed with the whipsaw that happened due to the rate cut. He didn’t surprise with the base rate but did with the marginal rate which for some reason looked to be positive. As members probably know well my thoughts are manipulation. If I am going to error it will always be in favor of that rather than that type of news really being positive. I will admit I was looking pretty hard for a reason price action wise to short that EUR/US but couldn’t find a good enough reason before it was too close to the speech so I missed the nice run down. Like I always say its better to miss the move rather than break your rules and get paid. 😉
Today I will be looking for the continuation but the chance for a long to retrace some of the inefficient move don is there. The levels I will be looking to short from are the hourly 200 EMA around the psych level of 1.3100 or just a bit higher at 1.3116. There is the chance of the retrace all the way to 1.3145 before it makes the next push which is why I will be open for a long to pull 50-60 pips from he market. The best level I see for that is the 4 hour 200EMA where it found support yesterday but if it cant make the test and manipulation during the first few hours of the London session I will just be patient and wait for the short.
The GBP/USD also has its first push to the downside and went off from the 87 level I had posted in yesterdays commentary. I was tempted to take the beautiful short set up I know some members took but I was set on taking the EU for the larger move since the ECB news had a high chance of making the GBP/USD pop up and take a tight stop. My plan requires closing if I cant get the stop to break even at least 30 minutes before the news so I would have closed close to break even anyway but good job to those who got in on the nice run. Its fine if your plan is to just hold through the news but it has to be something you stick with for it to be the plan. Its aggressive but as long as you know the risks all is good.
I will be looking mostly for the short here too but the potential levels aren’t as good as the Euro. The best one I see is the 1.5542 break out level near the Asian highs so far but the 1.5550 level just above has had several reactions so that is not too bad. Otherwise if it does push above there the manipulation will need to be clear since it could find the place they want to stop the push anywhere in the two wicks to the downside before the breakout. The potential for a long is there but it is smaller. Wednesdays lows are still valid but with the close proximity to price I don’t like it as much and would prefer a stop run to yesterdays lows to consider a long.
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Forex News Today
The calendar is light until US NFP during the US session. There is the UK Services PMI during London but will take a decent surprise to get some movement. Still being well above 50 a miss in either direction will need to be sizable and will most likely be used to just manipulate rather than create any sustained move.
NFP and the Unemployment Rate are expected at 145K and 7.6%. Of course a large miss in NFP will be positive or negative depending on the direction but I expect it to be close. Considering the better than expected Unemployment data yesterday there is the chance for a drop in the Unemployment Rate and that will be more positive for the USD as long as NFP is not a devastating miss downward like it was last month. Since the Fed is looking more to the (fixed) Unemployment figures the market will go into the “Fed will slow purchases and the USD will surge.
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