Analysis of EUR/USD, GBP/USD for June 26, 2013
Just when we expect things to clear up for us we get more confusion. The Euro today has stayed in the range we were hoping it would break out of to give us a clue on direction. We should get that today but one never knows what the smart money has up their sleeve. My guess is they are waiting for some clue from Bernanke that he will come riding to the rescue with a few more billion in bond and MBS purchases so they can continue the ramp up in equities. I have to admit I am a bit torn on the likelihood. On one hand if bond interest rates keep rising it will be a disaster for the US debt load. On the other Bens hands really seem to be tied on the issue. The Fed is out of ammunition and adding to the QEternity will most likely have even bigger implications down the road. Kind of like what is going on now with just a hint they may taper off and the smart folks holding US bonds run for the doors. Great job Ben.
Looking at the price action alone it seems as though they will push it down today but seeing the lower closes during London and New York is not enough to build a bias so I will be keeping an open mind today on direction. If I look hard I could make myself see a false push up and an intraday push to the downside but as I always tell members, the harder we have to look for the pushes the less reliable they are. Seeing the hourly close below Mondays lows would be much clearer.
The best place I see for a short is the range between 1.3100 and 1.3111. These are both proven resistance levels that are close together so I will be watching there first. Otherwise a stop run to the 1.3150 at yesterdays highs would get me short also. There is really only one level for the potential long position at yesterdays lows of 1.3065.
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The possibility for the GBP/USD having the first push up has gone down today with it not being able to see an hourly close above Mondays highs. Its looking more like a false push at this point but that wont be confirmed until it actually does push and close below Mondays lows. I have to say its been a long time since I have seen that 4 hour 200 EMA get so much respect so that will be the first place I look to short from.
Having said that with the Asian range being tight the entry will be aggressive so I will be patient and wait for two sets of manipulation candle patterns to confirm. Otherwise yesterdays low is good for the potential long but since it is still in the range of the third push chop it carries more risk so I will need the confirming candle patterns there also. If we get the hourly conviction close below the 1.5396 during the London session I will be bias for the short and look to either the Asian lows or mid level (If the range is more than 35 pips) or highs of the Asian range.
The news is light again today with only a speech from BOE Governor King during the London session. This should be interesting and fun. This is his last week before he hands over the reigns to Mark Carney so when he gives the Financial Stability report my guess is it will be another “all is well and what a wonderful day it is”. Of course it could and should be the exact opposite so watch out for that time of day. There is also the ECOFIN Meeting today so keep an eye out for the tape bombs.
The US has some GDP data released today but barring a big miss (most likely to the downside if there is one) then I don’t expect much from it.
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