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EUR/USD, GBP/USD Daily Commentary January 21, 2013

The concern I had in Fridays commentary about the resistance level at 1.3400 on the EUR/USD proved to be well founded, and it turned at 1.3397 to make a nice 3 intra-day push drop. As of right now we will treat as a first push down. Having said that the wiser move today will be to treat this as it still being in a third push chop since it is holding the range between 1.3400 and 1.3250 rather well. Of course I will have a small bias to the downside due to the the cycle, but I want to see some clear accumulation going on before I will expect the manipulation to the upside and then next push down. If we get this same sort of price action we have seen with V reversals, then I will stay away from this pair until they make up their minds in regards to market cycle. 

There was a nice bounce off the hourly 200 EMA on Friday so if there is an hourly stop run to that level I will be open for the long since this is the first push and this range is holding well. I will want an entry as close to Fridays lows of 1.3280 as possible if this does setup. The problem with the entry there is we have 2 more daily lows below that level that they may want to test if they do plan on reversing it this week. Therefore, if we get an hourly close below the lows and I am in a long position, I will just close it at a small loss or break even if possible. What I would prefer to see is some nice accumulation during Asia and then the push up to the 1.3332 level for the short. The best thing is to lay out the possibilities and trade accordingly as it unfolds with the manipulation at key levels being the guide as always.

1 hour chart of the EUR/USD on Jan.21, 2013

The GBP/USD made a clean extended push Friday. I know I mentioned in Fridays analysis there was potential for the break down considering the price action Thursday did break and close below the Wednesday’s lows. This should give you an idea of why I put that much weight behind these hourly candles closing above or below significant levels. There was a fairly decent set of manipulation candle patterns during the London session but the level they occurred at was not good at all, and I wont take those sorts of entries. Simply put they are too risky especially taking into consideration the potential for the reversal Friday.

Now its in the extended push situation and the reversal could come at any time. Having said that I am still slightly bias to the downside because when looking at the daily chart there is still some room to the next daily low even though its only 40 pips away right now. What is problematic with the short is there isn’t much for significant levels to potentially see the manipulation at for the entry. Therefore I will be looking for confluence at the 1.5920 level or the 1.5880 level that held it down after London closed Friday. The manipulation at the lower level will need to be pretty clear, and if we get an hourly close above it today it will likely test the next psych level at 1.5900 and eventually 1.5920 which is where I would be happiest to short from. Otherwise if it does push down to test the daily level at 1.5818 I will look for a long on any manipulation there.

 1 hour chart of the GBP/USD on Jan. 21, 2013

Forex News Today

Scheduled news is light today with only PPI figures from Germany. They are expected to be flat at 0.0 so I doubt there will be much movement even if there is a surprise. 

There is also the European Finance Ministers meeting in Brussels later today so keep an eye out for the tape bombs.

No scheduled releases from the UK or US today.

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I Knew The Banks Had Someone On The Inside

I could never prove it before but the way every market is manipulated its is pretty clear that the big boys had someone on the inside. Given the fact that its illegal I would expect that they would keep it a very well hidden secret. However finding out that the one making leaks to the big banks was none other then Turbo Tax Timmy G. did throw me for a loop. That is just nuts and to think the probability of him even getting a slap on the wrist is unlikely. Much less the jail time he deserves. I found this article over the weekend that I just had to share. My question is when are the people going to get angry enough to do something about the blatant corruption in the US financial system? My guess is it wont be any time soon. Anyway here the excerpt from the August 16, 2007 transcript of the Fed Meeting and here is the link to the full article.

MR. LACKER. If I could just follow up on that, Mr. Chairman.


MR. LACKER. Vice Chairman Geithner, did you say that [the banks] are unaware of what we’re considering or what we might be doing with the discount rate?


MR. LACKER. Vice Chairman Geithner, I spoke with Ken Lewis, President and CEO of Bank of America, this afternoon, and he said that he appreciated what Tim Geithner was arranging by way of changes in the discount facility. So my information is different from that.

CHAIRMAN BERNANKE. Okay. Thank you. Go ahead, Vice Chairman Geithner.

VICE CHAIRMAN GEITHNER. Well, I cannot speak for Ken Lewis, but I think they have sought to see whether they could understand a little more clearly the scope of their rights and our current policy with respect to the window. The only thing I’ve done is to try to help them understand—and I’m sure that’s been true across the System—what the scope of that is because these people generally don’t use the window and they don’t really understand in some sense what it’s about.

Enough said. Now we know who is the man on the inside is and exactly who our Treasury Secretary works for. It sure isnt the American people

Happy Trading


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