July 4th 2014 EUR/USD, GBP/USD Analysis
We did get the second push on the Euro as I expected yesterday. I did end up taking the entry short in the Live Training session yesterday even though I planned to take the day off trading. The set up was great and had a lot backing the entry from 1.3658. Once it slowly moved off going 10 pips in my favor I tightened up the stop to hold through the NFP release. The last thing I wanted was to take more than a full hit if the numbers were disappointing so even if I was slipped on my stop I had a good chance of not taking more than a 20 pip hit. Needles to say it was much better than expected and it made the 40+ pip drop within 30 minutes. I also moved my TP well out just in case Draghi had some new news on the ECB print fest coming but he didn’t so after watching through the press conference I closed for 50 pips before going to bed. Not a bad beginning to July with two trades and 110 pips. I could easily take the rest of the month off but we all know that wont happen 🙂
In a normal situation I would be looking for the third push down today but being a holiday in the US and no real news on tap to move the markets today the chance of a decent move is low. There is also the chance of the end of week flows to retrace the inefficient move down as well. For the most part I will be looking for the short but still open for the long from the 1.3600 if they show they wont let it drop below the psych number. The best level for the short is actually up at the four hour 200 after a retrace of the move yesterday but if they do show conviction below yesterdays lows then a pullback to 1.3609 or 1.3617 will be where I look for trapping to short from.
The GBP/USD was the pair I preferred to trade with it having the better chance to move off during the early London session since it had earlier news being released. Even though it did set up for the long it didn’t come back for an entry until after the news that was disappointing so since I was already short the EU I wasn’t going to increase my risk on NFP day.
I wont be having a bias on direction for this pair today but the rejection at the lows does show the potential fake out so the probability for the run up seems better but remaining open on direction is the best way to trade it. The best level for a short considering where current price is at 1.7175 but if they do manage to widen the Asian range this morning the daily 1.7164 is valid. The same pretty much goes for a long down at 1.7113 while the 1.7139 is valid with a push to the upside during the Asian session.
Forex News Today
The calendar is rather dead today so with no real news to get them pushing the chance the week end flows just make price chop around is good. There is the German Factory orders that could spark a move on a big miss but I have my doubts any deviation will be big enough to create a sustained move.
Have a great weekend
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