Analysis of EUR/USD, GBP/USD, EUR/JPY September 23, 2014
The EUR/USD did make an attempt at the next push down yesterday but held in a 50 pip range coming in just shy of the 1.2868 level then showing some conviction to the downside during the NY session later in the day. Therefor I will still have a bias for the short today expecting the run down to test the next daily level. The best level to see the trap is up at 1.2865 but the 1.28545 is valid as well. If they do manage top push it down far enough during the Asian session I will consider the closer level to current price. Otherwise there will need to be something clearly showing they wont let it pass the highs of yesterdays NY/London overlap to get me to take the trade without widening the Asian range a bit more.
The GBP/USD had the same start to the day yesterday but closed stronger as the EUR/GBP moved to the downside on the day. At this point there are still the over sized moves to consider so I will be more open on direction on the GU since we didn’t see any continuation of the down move yesterday. At this point the move down may have been just a pullback to run longs out of the market before the next move up. We will get more information today. While I expect the daily level at 1.6464 to hold it down again they may have other plans for the Cable these days since they did test it rather low over the last few months. The best level for the short was yesterdays highs but now that we have the conviction above during the Asian session I will look to see if that is confirmed in London and trade the long from the Asian highs or lows . Having said that the best level for the long after confirmation is the Asian lows at 1.6355 since breaking below would show the conviction to be a fake out. Its possible they will hold it back at the 1.6400 psych level but if they do push it up they are likely to test 1.6464.
The EUR/JPY fallowed suit with a tighter rage as well. I will have a small bias for the short here today since the UJ isn’t helping any push to the north at the moment and may be in for a decent pullback after the big move it has to the upside. That along with the EU weakness should drive the EJ in an extended move if they break and show the conviction below yesterdays lows today. It does have the large push down as well but being an extended push there was the potential for the reversal yesterday if they were going to move it on JPY weakness. Since that didn,t happen now the higher probability with all things considered is for the move to the downside. Right now its still having problems with yesterdays lows so there is still potential for the long there if they show they wont let it pass or there just isn’t any interest in the break lower. Otherwise if they cant show the conviction that I would prefer to see before taking the short and they play the breakout traders during London I will look for the trap at the Asian highs if they don’t show a clean set up for a long at yesterdays lows and I am long. I am hoping for the conviction to make it easy 🙂
Forex News Today
The calendar is busier today with Manufacturing and Services PMI from France, Germany and the Euro Zone. Expectations are for slight drops across the board so a big miss should get them pushing or at least running some stops early on. As usual the German figures are most important but a drop below 50 on the EZ figures will likely make the Euro weak as well.
The UK has Mortgage Approvals expected to rise as well but considering they haven’t changed anything with the help to buy scheme this should be a non event.
The US has a couple more Fed speeches but considering how in line they have all been lately I don’t expect much from them today either.
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