EUR/USD, GBP/USD Daily Analysis September 4th 2013
The EUR/USD has finally completed an extended push yesterday. It also formed a nice bottoming formation showing the potential for the reversal today has gone up. Since this push has also taken 2 days to form tells me that the conviction for lower prices is waning. Therefor today I will have a small bias for the reversal while still keeping an open mind for a continuation to the downside. The best level for the long is yesterdays lows of 1.3138 if the Asian range stays tight. Otherwise if it can first push up and test the highs around 1.3200 I will consider the long at 1.3155 with the right price action. If it can manage the hourly conviction above 1.3200 before I get an entry my bias will be solidly long and wait for the pullback and trapping patterns.
Since the probability for the short is still there potentially making a run down to test the daily 200 EMA. The best level for that is yesterdays highs around 1.3200 so if I see the hourly stop run above that level I will want to see some trapping there to short from. The importance of a good entry there is high due to the potential reversal so if it gets the hourly close above I will exit for a smaller loss.
The GBP/USD looks as if they were flushing out weak holders for a larger move yesterday. I can mark an intraday push down to give a small bias for the next push in the same direction. However the levels are not that great being inside what looks more like a third push chop than conviction on direction. If it can make a move down during the Asian session I will consider the short at the 1.5580 psych level but will want a clear set up being its still in the middle of this chop. The same goes for the highs during the New York end of day but I will want to see the Asian range widen showing they have probably accumulated enough position to run it south from there. Of course the potential long is there too but I will only consider it at yesterdays lows and if I’am not already short.
Forex News Today
The economic calendar is light again today. There is Services PMI data from some European countries but the only one of importance is from the UK. Expectations are for a drop to 59 from 60.2 and if we get the miss to the downside we will most likely see GBP weakness. An hour after is EZ GDP but I have my doubts this release will cause much ruckus.
The US don’t have anything of note until late in the day with the Beige Book. I have my doubts this will cause much of a move unless it surprises the market. Of which the probability is low the way I see it.
The War Drums
It would seem that the other day when I was thinking the war drums were toning down a bit was wrong. Sure they did quiet down somewhat but now its looking like they were just resting rather than winding them down. Yesterday the Israelis did a missile test in the Mediterranean Sea while the Russians deployed more ships to the region and Senators in the US that had recently questioned Obummers escalation of the situation over “knowing” it was Assad who used chemical weapons on his own people. At the same time a hacker released some hacked emails from a senior Pentagon official saying that the whole chemical attack was staged. No one was actually killed. I’m not saying its all that credible but figured you may want to makeup your own mind. At the very least something is very fishy. This wouldn’t be the first or the last false flag in history. The question in my mind is what the heck are they thinking really. Anyway check out the article and make your own conclusion.
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