Fed Under Pressure As US Data Improves March 25, 2015
US CPI and Housing Data Beats Expectations Increasing Pressure On The Fed
With CPI in the US creeping closer to the 2% threshold the pressure on the Fed to be raising rates sooner rather than later will increase if other data releases continue to impress. Im not going to go into the fact that most all the data is manipulated to give the impression every thing is awesome but I am also not going to discount that there could be a miracle in the works no matter how much I doubt it. At the very least we should see a decent surprise in todays Durable Goods data as well since household appliances are a good chunk of it. If by some chance it does disappoint then it will show that only the rich are buying up the houses and not filling them with new appliances, hinting towards the housing data not being what it seems. Lets hope for the miracle. 🙂
EUR/USD Rejects Push Upward
The EUR/USD did make a valiant effort to make the next push yesterday but was soundly rejected when the US data came out better than expected refreshing the possibility of a Fed rate hike. However there wasn’t quite enough conviction to get the break below the support level at last Fridays highs. At this point I will be more open on direction considering the topping we have at the highs and potential H&S formation signaling a reversal. The best level I see for a short today is up at 1.0969 but there is certainly potential for the long off the lows at 1.0900 if they manage to hold above and don’t show conviction down during London today. Otherwise any good conviction below yesterdays lows will make me bias for the short on a backside entry.
GBP/USD Undecided Holding range
With the GBP/USD still holding the range the best trades will be at 1.4975 for the short or 1.4833 for a long. The 1.4901 is valid but does carry more risk trading inside this range. I will only consider it since it does have the hourly 200 as confluence and on a clear trap there during the London session. Having said that if the USD strength does kick in expecting better data later then this pair will break down with the EU and I will be looking for the backside entry to the Asian lows.
EUR/JPY Fails Next Push
With the range set on the EUR/JPY for about a day and a half now its less probable we will see the next push upward if it cant start soon so I will be more open on direction here today as well. As with the GU the safer entries will be at the extremes of the range at 131.28 for a short and 130.78 for a long. Since there is nothing to add for confluence at 130.92 I wont be considering it as a potential level.
Forex News Today
News releases during the London session are light with German IFO Business Climate data expected to rise again which could be Euro positive but I doubt it will be enough to stop the ECB print fest so will more likely be used to run stops. The UK has BBA Mortgage Approvals expected a slight rise that could be GBP positive but would need a better print to crate any sustained move.
The US has Durable Goods data I mentioned above and should be better than expected considering recent housing data. If its not then something is likely awry with the housing print.
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