March 14, 2013 Daily EUR/USD, GBP/USD Analysis
The EUR/USD finally got the daily close below the 1.3000 level yesterday. I have to admit I am a little concerned it took a better than expected Retail Sales release from the US to make it happen. Mainly because these latest news events dont really convince me that helicopter Ben is going to take the easy money punch bowl away any time soon. Therefore this may not hold below here for very long. The test of it from the downside and holding below today will be a better sign for me.
There are several things afoot in the Euro Zone that could help but it almost seems inevitable that the US still has some risk appetite despite the house of cards seemingly getting ready to crumble in Europe. The break down of the Troika talks with Greece being one of several. I should also point out that price did reach the hourly 200 EMA mentioned in yesterdays commentary but I didn’t take the entry since the manipulation was not clear and our members know that I gave up chasing trades years ago. I did however stay up late and take the NY reversal after the set of legs formed with the hammer at the lows and just closed it for just under 40 pips this morning.
Today I am cautiously looking at this as the first push down but I want that 1.3000 level to hold after a test to confirm. It already has set the 26 pip range and finding resistance at Mondays lows so that may be all the upside it has in it. I have my doubts and will be looking for the stop run into the 1.3000 level during London today. There is also the chance they will stop it at Tuesdays low at 1.2990 but I will need to see some clear manipulation there in order to take the short with 1.3000 just above. The same goes for the Asian highs. Its a valid manipulation level but it will have to be almost screaming “take the short” to enter there. The possibility for a long is there also but trading against a first push needs to be very clear also and I have my doubts they will provide it. We will see.
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I have to admit I was a bit perturbed with the GBP/USD yesterday. Having caught the short from 1.4965 after the several signs of manipulation it went 29 pips in my direction (well over enough to get my stop to break even) only to come back and knock me out by the spread just before the 60 pip drop. I wasn’t happy to say the least. Like I always say. Price needs to be loud and clear with the manipulation to trade against a first push and it was once it tested the manipulation box with several sets of manipulation candle patterns we look for before the test.
Today I will be looking for the long first considering the first push up. The levels for the highest probability for manipulation will be between 1.4910 and 1.4890. With the psych level of 1.4900 in between it could happen any where in that area so it will need to be clear. I am also open for the short from yesterdays highs but would prefer a stop run above for the short.
Forex News Today
Again today the economic calendar is light today. However as usual we will probably get several rumors from the EU Summit to move the markets.
There is an interest rate decision from the SNB today that could have some impact if there is any talk about the floor on the EUR/CHF but I have my doubts that will happen. Otherwise the ECB monthly report will be one to watch for any words on the weakness in the Euro Zone. Since Super Mario did say in the press conference that they did discuss a rate cut it will be interesting to see if that is mentioned and in what light they discussed it.
The UK dont have anything on deck today.
The US has the weekly Unemployment Claims and if we get a big miss to the upside it will reinforce that Ben wont ease up on the presses just yet and be USD negative. How negative is questionable since we may get some news on Europe but I expect more of the all is well attitude to prevail until its crystal clear that its not and they cant hide it anymore. There is also PPI data but with low expectations it will take a big miss to create some volatility. If there is a big miss upwards they will think the CPI figures tomorrow will miss upwards also and with those expectations hovering around 2% it may just create some USD strength if the miss is big enough.
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