January 20, 2014 Daily EUR/USD, GBP/USD Analysis
Fridays price action on the EUR/USD gave the second push down I was looking for so I will be expecting the third today. The only problem I see is that with it being Monday there is the chance that they chop around like they did Thursday before they push it off. The daily support level at 1.3522 held up well at the end of the day Friday still having a close a the lowest point of the month showing conviction. Having said that the 1.3522 level is also Decembers lows so I expect its going to take more to break than we might see today. I will have a bias for the short and with the Asian range already widening out they may hold it at the 1.3540 level but I would be happier with a test of 1.3552 daily low so I will want to see some clean trapping at 1.3540 to short from there.
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The GBP/USD had a nice big move off the much better than expected Retail Sales data jumping more than two full percentage points on the monthly and almost three on the yearly figures. It sure looks like the housing bubble they are pumping back up in the UK is working for now. However I should point out that it also worked in the US for several years until it didn’t. I have a feeling this one will be a bit shorter lived but trying to time it is futile at best.
At this point I will have a small bias for the next push up here but will also be open for the short looking to see the inefficient move get closed moving down to around 1.6356. With the bias on these pairs in opposite directions one is likely to be wrong if the USD has an impact on price movement today. The probability is the GU will be the one that goes against the bias for the long and the best level to short from is around 1.6451. I will be open for the short at 1.6430 I price starts the London session around todays lows or we see some clear conviction below the hourly 200 ema during the London session. The best level for the long is down around the 4hr 200 at 1.6360 which is also close enough to closing of the inefficient move giving confluence so if I do get the short entry I will only hold for the 40-50 pips and call it a day.
Forex News Today
The calendar today does not have any significant events to mention so price will likely be moving slower since they have less to manipulate around. Providing we don’t have any tape bombs of course
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