Is The Pound Starting Its Break To The Upside? August 6th 2015
Euro Closes The Day Mixed
On the daily chart the EUR/USD is coming closer and closer to finally getting out of the very large descending triangle type formation. The compression of price has left us with a very range bound market for the past few weeks. As we neat the very tip of the compression the lack of direction becomes even more pronounced. It will be nice to see the Euro finally breakout and pick a direction.
Unlike the Pound I do favor a move down in the Euro. With that being said you can see I have manipulation points listed on both sides of the price and therefore would consider a trade in either direction should a trade setup from one of the listed points.
GBP/USD Creates Strong Reversal
I’ve been talking about a bullish move to the upside in the GBP/USD this week and today the move finally started to come together. Are we going to see a continued push to the upside? Time will tell on that but I will be looking for the long more aggressively today. Because we have a multi week high I would still consider a short from this level should a valid setup occur. Today is going to be an interesting day on the Pound as the MPC Rate Vote comes out later today. Because they are expected to be considering a hike I was expecting bullish momentum into the news if nothing else. We may ultimately see a buy the rumor sell the news situation but pre-news bullish momentum was not unexpected. To summarize, I favor the long on the Pound but would consider a short if we had a valid setup from the upper level of the multi-week range high.
Forex News For August 6th 2015
UK Manufacturing & Industrial Production 4:30 AM Eastern: Both pieces of data are important lately and both can create a large spike in the market. If your looking to trade this news I would make sure you see both numbers before trying to get in. If there is a conflict then you will likely see a muted move before the market picks a trend for other reasons. If however both deviate in the same direction then expect to see a strong move. This is especially true if you see the deviation on both of these to the upside. That would support a rate hike which might get people pre-positioning long before the move leading to an overreaction to the upside. I also think a worse than expected number could get muted with the rate hike talk coming out later in the day. Both news items are expected at .1 this month.
MPC Bank Rate Votes 7:00 AM Eastern: The first number is those looking to hike, the second is those looking to cut rates, and the third is those looking to keep rates unchanged. This month it is expected at 2-0-7. If it comes out 3-0-6 then expect a big move up…if it comes out at 1-0-8 or even worse 0-0-9 then expect the Pound to get smashed especially if the market is bullish going into the news. Remember the move prior to the news is just as important as the number itself many times.
BOE Carney Speaks 7:45 AM Eastern: Especially if there is a surprise then things could get wild. As always the first 10 minutes of any speech are when any tape bombs are dropped. Aside from that the only other risk is when/if the question and answer section takes place.
US Unemployment Claims 8:30 AM Eastern: This is a non-event and I would not give it much concern. The only pair that gets a decent move off of it from time to time is the USD/JPY. Other than that it is generally a non-event.
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