Analysis For EUR/USD, GBP/USD March 7, 2014
Thanks to good old Super Mario we had a nice 150 pip move on the EUR/USD yesterday. From what I can see the big boys were expecting him to actually go full blown QE that many have been talking about lately. I have to say I agree that eventually they will but I can only assume that things haven’t gotten bad enough in Germany to get the Bundesbank on board with the idea. Therefore we will have to see much more negative data from Germany to think that the ECB will be able to start its version of a print fest. At this point I am thinking its only a matter of time.
Considering this move along with it being Friday the higher probability is we see a pullback today. It does qualify as a first push but with it being so large its out of context so I am open on direction today. If it can manage to widen the Asian range to the downside I will be open for the short at yesterdays hi or the Asian highs if its wide enough. Otherwise once we get the push down to 1.3824 I will start looking for a long but if that cant hold it will likely test down to 1.3790 which is where the average daily range lows are currently. I should also say that the daily close yesterday has blown out some significant daily levels. There is one more overall high at 1.3891 that may provide some resistance but if they break it above there either today or next week there isn’t any daily resistance until it reaches 1.4185.
The GBP/USD had the second push up after getting whipped around when Draghi started his speech. I will have the bias for the next push up but not so strong that I will ignore the possibility of a short. The reason is being its Friday and the possibility of this being a third intraday push from the lows. That scenario is less likely but enough to make the think twice about only considering the long today. The best level for the long has already been hit during the Asian session at 1.6727. If that breaks they will probably test down to around 1.6707. Otherwise I will want to see the Asian range widen to the upside from here and then test down during the London session to take the long at the Asian lows. The only place I will consider a short is around the highs yesterday and only if there I miss the long and show clear signs they wont let it pass. If I do get long I will hold for the break with the next daily level at 1.6820 looking to take profit there.
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Forex News Today
There really isn’t much news worth mentioning until we get the US NFP release when the NY session opens so there is the probability we don’t see much movement until then today. Having said that, with the jobs data not having as much of an impact as of late we still have the chance of getting a decent set up beforehand though. just be careful holding a trade into the release if you don’t already have your stop at break even and be ready for some slippage if there is a big miss.
Have a great weekend
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