Major Support Approaching On GBP/USD – FX Daily Forecast 3/24/16
Euro Stays In Channel
For the last two days my analysis of the EUR/USD has remained unchanged. I continue to favor the eventual upside move, and until the price breaks below and holds below the current channel that will more than likely continue to be the case. Once these type of inverse trend channels reaches the 200 EMA on the hourly the decision is generally made to either shift direction or continue. As we have reached the 200 I would expect a break of the channel today more than likely. At this point I do not have an upper manipulation point. I explained this in detail in tonight’s daily market preview, but essentially no level stands out. If you cannot clearly identify where the liquidity is likely to be located then it is far better to simply avoid selecting a weaker level from which failure is more likely. To the downside however, we have two quality points. The first lower level puts the entire long side of the market into the red. Anytime you have a short term level that represents the overall low or high it becomes the point for which one side of the market goes negative. These areas tend to be quality manipulation points as they are the point from which decisions are made and in trading, decisions equal liquidity. Below this point we have one additional lower level that would be a solid point for a stop run long.
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GBP/USD Gives Second Push Down
The GBP/USD gave the second push to the downside that we were looking for in yesterday’s daily market forecast. This does however put us in a unique situation. Normally I would now look for only the third push to the downside but we are approaching a major lower manipulation point from which a third push has a higher probability of stalling. As such, I will go back to trading with an open directional bias for today. While the third push could still occur, when we have a situation like this I like to open directional bias up and allow the reversal option as well. As you can see in the chart we have one upper and one lower level for the GBP/USD today.
Forex Market News For March 24th 2016
UK Retail Sales m/m 5:30 AM Eastern: Retail Sales has seen a very strange change over the last 3 months. This has gone from being one of the best indicators for continued follow through to one of the most consistent forex news events for reversing the price. Looking back over the last 3 months the initial spike has been shot down within 20 seconds after the release. In close to 10 years of trading I have never seen this happen to UK Retail Sales. When this same thing occurred CPI indicators back in 2008 we had a reason behind it, but this does not. The big take away is that historical price action has shown we shouldn’t expect continued follow through in the direction of the release. For this month .7 is the expected number.
US Core Durable Goods 8:30 AM Eastern: Durable Goods is right on the edge of being taken off the list of 15+ pip spiking news events. Really just one spike is one keeps it as an event I would not carry a trade into. If this trend continues then in a few months it will be removed. For this month -.3 is the expected number.