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Forex Daily EUR/USD, GBP/USD Analysis December 10, 2012

The EUR/USD made its third push as we expected Friday, however there wasn’t an entry to be had during the London session as it ran off straight out of the Asian box. No worries though because as it made the 90 pip push into the daily 200EMA and the average daily range I did take an aggressive long entry for the reversal for a nice 50 pips to end the week. That did make me feel a bit better since I missed the beautiful 130 pip second push. 

Today we have a gap down to start the week due to some news that the Greek debt buy back hasn’t gone so well. I have seen conflicting reports though so I expect that gap to close. Since it has already tested the break out of Thursdays lows and been rejected I am concerned about committing to the reversal today. We always keep an open mind in a third push chop situation but what I am expecting here is to see them loading up before the break of the daily 200EMA.

Levels to watch today will be the lows at 1.2878 for a 1 hour stop run for a long or the break out level tested during the US session Friday that is also Thursdays lows at 1.2949 for the short. I would prefer to see the stop run at Fridays highs for a clearer short entry but it may not make it there. I also want to mention that the EUR/GBP has made a 3 push move down and is due for the reversal so that may give the EUR/USD some help to either start the full 3 push move up or possibly a false first push for the reset before the break of the daily 200. Since the GBP/USD still needs to complete its third push there is a good chance we see the reversal in the EUR/GBP while the EUR/USD chops around for the day.

1 hour chart of the EUR/USD on Dec. 10, 2012

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The GBP/USD having seen the second push we will be looking for the third today. Depending on how the markets trade today considering the USD the GBP/USD may make the third push from here at the break out level from Friday but has a chance of getting to the top of the supply zone at Fridays highs of 1.6060. Looking at how both pairs were dominated by the USD Thursday and Friday last week this could continue and we get extended pushes in the Euro while the Pound makes the third.

Being sandwiched between the hourly and 4 hour 200EMAs and both being respected well, it will take some conviction to make the break. My bias is of course for the short but its going to need some help from the EUR/GBP in order to complete it today. Therefore it does have the chance of just chopping around before it makes the third push. The daily chart shows some buying pressure at these levels also and that adds to the potential chopping here. The entry I would be most comfortable with would be seeing some manipulation at the hourly 200EMA for the short.

1 hour chart of the GBP/USD on Dec. 10, 2012

 Forex News Today

Scheduled releases are light as typical for a Monday. There are French and Italian Industrial Production figures but I doubt they will do much in terms of movement barring a large surprise. There also is Sentix Investor Confidence for the EU but its a medium impact even also so without a large miss I doubt there will be anything but a small manipulation. Today should be mostly price action based but lets not forget the potential for the tape bombs 🙂

Late in the day there is a BOE Governor King speech so this may be when we see the final push on the GBP/USD

Lets Beat A Dead Horse

We all know beating a dead horse does no good but in this situation I feel compelled to share the one success story in this whole financial fiasco. I use this analogy because no matter who says or writes anything that we all know will be the end game of this mess. The western governments just ignore it and keep up with the status quot to protect their jobs and their crony buddies. Eventually going full blown Zimbabwe unless something forces their hand. 

I am talking about Iceland and what they did in order to get back on track. They are a great example of what should have happened in other western nations. While the actions taken by the rest of them have followed the example of Germany in the 1920s and of course more recently Zimbabwe. I dont remember who said it but it rings so true in this case. “History does not repeat, however it surely does rhyme”

Here is the picture of the president of Iceland with his quote. This is priceless.

You can read the full article here.

Iceland president quoted on why they are recovering

One wonders with the historic examples we have in front of us why the west keeps going down the wrong path. The answer couldn’t be more simple than the brief moment of truth that came from Jean Claude Juncker recently. “We know what we have to do, we just don’t know how to do it and get re-elected”

Happy Trading


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