March 4, 2013 EUR/USD, GBP/USD Analysis
The short entry on the EUR/USD last Friday was absolutely beautiful. They don’t get much better than that guys. I will admit the stop run above the 1.3100 didn’t happen. However if you look back and you will see it on the chart below that all they needed was to get the stops above the 1.3094 level (the same level I was first looking at in the March 1 commentary) and they showed some awesome manipulation and even gave the nice pullback. I know there were several members who caught that trade so good job guys. There was well over 100 pips on the table and you should be happy if you caught half of them. I also want to give a pat on the back to those that caught the NY reversal for a nice run too. Good job to you guys too.
Today I will be looking to see the third push down. These are still intraday pushes but they have been rather clean with 3 short term intraday pushes in each of them so the probability is still heavy to the downside. I am a little concerned that the daily chart couldn’t close below the 1.3000 level but I also expected some support there. Its just that the daily close below would give an even clearer picture that they will be headed down this week.
The levels I will be keeping an eye on are the 1.3041 and 1.3052. The 1.3041 level has the highest probability since its proven resistance but don’t underestimate the potential for a stop run above it to reach the breakout level. If we do see the push down during the Asian session then the Asian highs come into play more and there is a decent chance for that happening with the gap down this morning already closed.
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The GBP/USD literally had its butt handed to it on a platter Friday. I did expect somewhat of a disappointing Manufacturing PMI release but getting slammed well below the 50 expansion level to 47.9 was a massive surprise. The selling didn’t slow down for an hour and price never recovered for any sort of pullback that could be construed as a recovery. At this time I will be treating this as the first push down with potential to have 2 with the 200+ pip run Friday. Either way Im looking for the short. The levels to be looking at are the resistance after the drop Friday at 1.5044 and if that cant hold and give us a stop run then the next place to look for manipulation is the 1.5072-80 level. I would expect some pullback of the inefficient move here but to think they will retrace the whole thing is not in the cards I think. The next level down it has a good chance of testing before a potential reversal is 1.4943 from the daily chart.
Forex News Today
There is only one news event worth mentioning today. The UK has Construction PMI figures expected to improve but still be below the 50 level. My expectation is for a disappointment more than anything but there is a small chance it will be expected or better.
The way I see it is the big boys will still be digesting the sequester situation in the US along with the Italian fiasco. I have seen some reports over the weekend that there has been talk of Italy exiting the Euro but that comes from the Grillo side. The likely hood is that there will be more elections in a month or so to try again and form a government. However I cant say I see much changing since Berlusconi is being investigated for corruption every one knows he has done. The other choice is Bersani who is all for the austerity and stands to lose more of the vote the next time around. Leaving the choice between the crook and the comedian. I will admit that at this point in time it seems the world has a better chance with comedians running things than the elites we have now that are trying to control every thing while they protect their friends and themselves for the most part.
Gallager for President! 😉 Vice President Carlos Mencia. Nobody tells it like it is like Carlos
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