March 19, 2014 Daily Analysis of EUR/USD, GBP/USD
There hasn’t been any change on the EUR/USD with the movement from yesterday with it staying in the 67 pip range so again I will be looking at either the high at 1.3941 for the short or waiting to see them run it to the lows at 1.3878 for the long. Its pretty clear at this point that they simply don’t have any conviction on direction for the EU right now so just being patient until they do show us something on this pair, trading within the range is the safest way to trade it as of now.
With current price being in such close proximity to the potential short level I will prefer to see them test lower during the Asian session to widen up the Asian range or the probability goes up for them to break the highs during the London session to make the push upward. If that does happen and we get the conviction to the upside then I will have the bias for the long and wait for a retest of either the Asian highs or lows if the Asian range is tight. If they do manage to widen the Asian range to the downside then the 1.3934 level is valid for the short as well.
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The GBP/USD has made a clearer first push rather than a second push I was looking for on Monday. With it going into the chop for over two days it shows they aren’t sure on direction. In either scenario I would be looking for the short today but with the first push I am still going to be open for the long due to the possibility of this push down being a fake out. The best level for the short is up at 1.6620 but they may also hold it at the four hour 200 EMA around 1.6600. If they do that they will most likely push down during the Asian session after the test. If they keep the tight Asian range like they did yesterday then I will want to see the playing of the breakout traders to the Asian lows before I look for the manipulation at the Asian highs or four hour 200.
The only levels I will be open for the long is the daily low at 1.6567 or yesterdays lows at 1.6544 but hope to be short if they run it down there looking to see the break down and next push lower.
Forex News Today
The high impact news during the London session is Unemployment data and MPC Meeting Minutes from the BOE. Sice they are being released at the same time the Unemployment figures will need a big miss to do much and they will be looking for anything talking about deflation in the Meeting minutes. The chance is low that the Minutes will surprise but if they show concern over deflation then it should weaken the GBP and we will see the next push down.
The US session has the Fed steps up with the Interest rate and Janet Yellen speech afterwards. Most are expecting another taper of 10 billion USD from the Fed monthly purchases and I think they will too but there is the small possibility they surprise and don’t. At this point I don’t think they have much choice and the markets will need a big move down to stop the tapering and eventually ramp it up but like I mentioned in yesterdays commentary it may be too late by the time they ramp up the print fest.
Asian session traders need to watch out for the GDP figures from New Zealand and another speech from the BOJ Koruda tomorrow morning.
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