EUR/USD, GBP/USD, EUR/JPY Daily Analysis September 24, 2014
The move on the EUR/USD yesterday showing a push to the upside from the lows is more indicative of a false push than a real first push up due to the relative chop its been in lately and now showing the head and shoulders pattern we typically see after three pushes when they are about to go for a full three push reversal. Having said all that I am not going to have a short bias but will remain open on direction with all things considered. With price hanging around in the middle of the range I will be open for a long at the Asian lows if they can hold it up during Asia today and leave the Asian box closer to the highs rather than the lows. I will also be open for the short at the top of the shoulder at 1.2859 but both these levels are aggressive in the middle of the range so the set up will need to be very clear and they will have to give me my entry preferably seeing conviction below the Asian lows during the London session to add probability to the short. If they do show conviction above 1.2866 then they will more than likely make the second push up today and I will be looking for a backside entry if I am not long from the Asian lows.
The GBP/USD also made a push to the upside after a fake out to the lows at the NY/London overlap from Monday. I will be treating this as a first push up as well since the moves have been sloppy to say the least even though if I look hard enough I can find two pushes to the upside. The problem is considering what I prefer to see is they make the pushes during a day rather than use the Asian session to finish one the next day. The best level for the long is down at 1.6552 but considering its 40 pips from current price they will need to run it down deeper during the Asian session in order to make an easy test during London. As long as they hold it up and test the highs I will also consider a good set up at the Asian lows but would be nice to see them play the breakout traders to the Asian highs first. I will be open for the short at 1.6408 wanting to see that they wont let it pass providing I am not long waiting for the break.
The EUR/JPY is showing a clean trap going on just above its hourly 200 along with the same going on with the GJ and UJ but I have to admit I am not thrilled with the level since it didn’t test what I consider the best one at 139.33. It did however pop 139.40 so as long as they give me the entry I will take it long from 139.46 while watching for any conviction to the downside. Otherwise the conviction move to the downside is a little concerning for a long but since it did make the intraday push up and down now, its in a no direction situation and best to take the highs or lows to trade the range.
Forex News Today
The only high impact news during the London session today is the German IFO Business Climate, Current Assessment and Business Expectations. All are expected to drop slightly and with what we have been seeing as of late the probability for a miss to the downside is more than a better than expected release. If it is worse it should create Euro weakness but it also has the possibility of being a bad news is good if they think the ECB will print sooner. I still say they wont so watch out for a stop run if it makes a pop on slightly worse releases. If some miss good while the others bad then they should offset each other as long as they are not big misses.
The US has New Home Sales expected to rise a bit. I have my doubts they will considering the previous miss on Housing Starts and Building Permits but its possible. The probability is low so I’m expecting a miss to the downside here as well. It just don’t make sense to see this data to improve when the others disappoint so big.
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