June 4, 2013 Daily EUR/USD, GBP/USD Analysis
With the EUR/USD trading more off the intraday pushes than I have seen in a long time I am more inclined to think we have 2 pushes up now and will see the third today. However I will remain cautious and be ready for some clear signs they intend to push it down. What I will want to see for a long position is Fridays high hold during the Asian session and see price leave the Asian box in the middle or on its highs. Then have London test down into that for a stop run before I am convinced totally they intend the next push up. Otherwise I will be willing to short if I see the hourly conviction close during the London session below the 1.3059 level. Wait for the pullback and manipulation against it and short from the Asian highs or preferably the overall highs at 1.3106. If Asia does make the push down below 1.3059 it will change my plan but only in that I will be looking for the same things at 1.3042.
The issue I have with yesterdays price action is it took the worse than expected news from the US (in the form of ISM Manufacturing dropping below the 50 level) to make this move up. They clearly think this was big enough to make Helicopter Ben think twice about tapering off the QE. I tend to agree somewhat but with all the talk of inflation risks and the massive drop in stocks with a not so great retracement I think the market isn’t really sure what Ben will do so we will have to play it by ear and wait to see.
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The GBP/USD is again in the same situation as the Euro today. Having two intraday pushes to the upside. Now that it seems the Asian session isn’t willing to make the push down the probability for the next push up has gone up in the last 40 minutes since I took the screenshot of the Euro. As long as this continues and we don’t see the push down later I will be bias more for the long than short today.
Take notice of the line I have at 1.5321. This is a significant daily level from May 16th that was broken out from yesterday and finding support now. This will make the Asian lows more significant today so what I will want to see is either the stop run there for the long while still watching the hourly close below to change my bias for the short. If they do intend to turn and go south what we will see is the hourly close below the Asian lows, a run to the next support at 1.5286 or so then a pullback with the manipulation at 1.5320 area. If the hourly close is not very convincing there is the chance they go back to the upside but I will want to see the clear trapping patterns at 1.5286 to take the long from there.
Forex News Today
The economic calendar is light today with only a couple medium impact events of note. The UK has Construction PMI expected to rise slightly. Probably a non event
The US has its trade balance and barring a large miss will also be a non event. Late in the US session FOMC Member Fisher Speaks but his views are well known against QE so I don’t expect much here unless he does a flip flop which I highly doubt.
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