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Forex Daily Commentary EUR/USD, GBP/USD July 9, 2012

The EUR/USD did the extension of the pushes Friday and squeezed out a forth push to the downside rather than attempt the reversal showing just how weak the Euro is at the moment. However today I will still be cautiously looking for the reversal. I definitely wont be holding for a longer push but the Smart Money needs to take some profit and we can usually get a good 50 or so pip run as they do. We are also sitting at a monthly low from the 1st of June that should find some support and at least be a good place to catch a low risk long position. If this does break the next level that has potential to at least slow it down is the 1.2150 level from June 2010. I do think this will eventually break but the chance for a pullback on this first test is worthy of a trade if the manipulation occurs at Fridays lows from last week. Otherwise if we do see the push to the upside during the opening hours of the London session with some clear confluence and manipulation I will be more than happy to short. The fact is all fundamentals point for a weak Euro.

I did manage to catch the 3rd push down on the GBP/USD Friday just before NFP. It was a slightly more risky trade considering the news but was worth the risk as it did give me the price I wanted and my 20 pip stop was well above the previous highs. The trade only went 6 pips against me during the release and never broke the highs. As I was listening to the release and in our live chat room I told the members there that even though it was worse than expected it wasnt bad enough to warrant more QE from the Fed and we should see the move down. It didnt take long until it was off to the races so I moved the stop to break even, set the TP and went to bed.

The GBP/USD is at its potential reversal point also and seemingly holding its bottoming formation for now. I do think this pair has slightly more potential as the weakness of the EUR/GBP may provide the up thrust during the London session today. Its hard to say mainly because there is the stigma of the EUR/GBP being below 80.00 having detrimental effects on the UK economy. However that may get thrown out the window as the potential for the Euro meltdown gets closer. I do see some interesting candle patterns forming on the 15min chart during the Asian session that leaves me a little concerned but still believe if the reversal is to come this pair has a slightly higher probability.

Forex News Today

Scheduled releases are light today with the only medium impact news from the EZ being Sentix Investor Confidence that is expected to slightly improve but is still in major negative territory so I dont expect much more than a potential for manipulation here. It will have to surprise significantly to the upside for any decent movement.

Later in the day we do have a bunch of rhetoric from  ECB President Draghi, MPC Member Tucker and from the Fed we have FOMC Member Williams. I wont be around but if you are in a trade during these speeches I advise you pay close attention as the potential for a surprise from Draghi is high and the others less so but still there.

Are We Closer To Bringing Out The Guillotine? 

You have to love it when the well known guys in this arena agree with what you say is needed to fix the problems we face with the greedy bankers more or less ruling the world as we know it and seemingly just getting more powerful as the man on the street suffers. Well it would seem to me they are running out of time and when we see people like Nouriel Roubini agree with little guys like me then things are getting ready to pop. Here is a great interview he did on Bloomberg that tells it pretty well. I have my doubts they will bring back the Guillotine for me but I will surely settle for some hangings in the town square. Of course we are still a ways off from this but I do believe its coming especially if the government dont step in a break these big guys up in a lower impact manner before the implosion occurs. Enjoy

Sorry the embed feature would work but here is the Bloomberg link.

Happy Trading


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