Analysis for EUR/USD, GBP/USD January 10, 2014
The EUR/USD today has gone back into the third push chop with another potential fake out to the lows during the Super Mario speech. Then retracing the whole move to finish the day closer to the highs. Since today is Non Farm Payroll day I highly doubt they will be showing any conviction before the data is released so trading the extremes for a short 40-50 pip run will be the safest trades during the Landon session. There is some hefty resistance at 1.3651 but they could run price into the wicks above before they run any distance for a short so I will be wanting to see some nice trapping patterns to take an entry there. Otherwise the safer short will be from a push to 1.3632. With the highs today 28 pips from 1.3581 there is the higher risk potential for the long from there but I would prefer to see price leave the Asian range around here before the push and stop run below there. Again the safer long will be lower 1.3565 level but with the wicks below it does carry a bit higher risk and clear trapping is warranted from there also.
Update: The EU short I took during the London Live session yesterday I closed close to break even just before the Draghi speech. It couldn’t get to a point of getting my stop to break even so I wasn’t going to hold through the speech. I am sure the pop up would have just hit my stop before moving off for 80 pips.
The GBP/USD tried to make the next push yesterday but just couldn’t muster a good run. It did show some conviction late in the US session but with the wick on the news to the left any sign of true conviction would be above that wick. Therefore its best to keep an open mind today. What would be best to see in order to take the long here today will be the conviction above yesterdays highs before a pullback to the Asia lows but I have my doubts that will happen with Non Farm later. If they do run it up during Asia and play the breakout traders to the highs and then the Asian lows the entry is still valid but I will want to see a clean set up and good entry as usual. Otherwise a stop run to yesterdays highs is valid also but again good entry warranted and only holding for the 40-50 pips today will be best.
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Forex News Today
Big news is really only the NFP from the US later in the day but there is a small chance the Euro Zone GDP figures give them reason to push things around a bit. It would take a rather large surprise of which I doubt will happen but its possible. If I am in a trade without the stop to break even I will close it before the release of NFP.
Have a great weekend
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