November 12, 2013 EUR/USD, GBP/USD Daily Analysis
The EUR/USD retraced the whole NFP move from Friday last week but hasn’t shown any conviction yesterday. I wont have a bias on direction today since it has stayed in the range for two days and will look to see the manipulation at the extremes of the range. I am still holding a short I took from 1.3399 yesterday and I will not be adding to it and letting it run its course. I do expect a test lower but if they want to do a stop run to the highs they will stop me out before the move. With some reports out there that the ECB will have no choice but to do another LTRO the fundamentals back the move down but no reason to enter a this price.
I will consider reentering if I do get stopped out with a clear stop run to yesterdays high of 1.3415 but the better level will be higher at Fridays highs of 1.3437. The best level for a potential long position is 1.3344 but with the 1.3317 level just behind it I will be cautious and want to see a very clear set up. As long as I am still short I will be taking profit just above 1.3344 and calling it a day.
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The GBP/USD made an opposite directional push due to the strength of the EUR/GBP yesterday. Im not considering it a confirmed second push since it couldn’t break Fridays lows with conviction. Its quite possible that we get the finishing of the push today but its looking more like its going to run off without giving an entry as of now. If it can pull back to the 1.5992 level with a stop run during the London session I will consider taking the short but will want to reduce the risk on my Euro trade first. It would be nice if we could have some dependable conviction to the downside but since there are several levels around Fridays lows I wont be taking a close below yesterdays or Fridays lows too seriously. I will only consider a long if it finishes this push or holds these lows through out the London session and there is a set up during the NY session. My thoughts are the probability for the finishing of this push is higher for a test of the lows around 1.5900.
Forex News Today
The only significant scheduled release today is CPI data from the UK. Its expected to drop to 2.5 and if it manages a drop closer to the 2% level it may create thoughts of room for more Asset Purchases which will weaken the GBP and this push will finish. There also is a Fed Member speech later in the ay but I have my doubts it will have a big effect unless Fisher lets something slip on more or less QEternity which is doubtful.
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