August 29, 2013 Daily EUR/USD, GBP/USD Analysis
The Euro made the reversal yesterday having made an attempt at the highs Tuesday during Asia and never looking back. We how have a clear first long term push down and I will have a short bias today. There is the slight chance for a long from the lows being a first push but I will only consider that if I miss the short and there is a one hour stop run with trapping patterns during that hour on the 15 minute chart. I would like a slightly lower test before a run back to the Asian highs and see the stop run to 1.3344 but we may not get it with the short daily range we are seeing. If it just runs off and we get the hourly close below yesterdays lows of 1.3304 or even better the recent lows just below then I will look to trade the continuation to the downside.
The GBP/USD did see the extended push but had the large pullback retracing the full daily move thanks to the speech from BOE Governor Carney mentioned in yesterdays commentary. Being an extended push the bias will be for the continuation and considering the Euro is weak also the chance for the reversal is diminished somewhat.
When we see extended pushes without a false push in the opposite direction they could do that false push at any time so we need to be cautious. The best place I see for the short is yesterdays highs at 1.5551 or just a bit higher if they want the stops above the New York high Tuesday. There is also the 15 minute 200 just above so there is already some good confluence there. By that time the Asian range should extend somewhat so will make me more comfortable they have accumulated the orders needed for the push. The only place I will consider the long is yesterdays lows most likely during the New York session.
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Forex News Today
There is not much for scheduled releases during the London session today. There is German Unemployment data but I have my doubts that will surprise. There is also an Italian 10yr bond auction just after the London live training room closes but will only make a ruckus if it goes badly. I will say Italian bonds haven’t done well lately so there is a chance and it should be watched.
The US has Thursday Unemployment data but barring a big surprise I expect the war drums beating will continue the USD strength. There is also Fed Member Bullard speaking early in the US session and if he puts water or fire on the taper talk there could easily be some volatility then. Later there is US GDP figures that have a decent chance to give them reason to manipulate. If its worse than expected than the taper thoughts will diminish and USD weaken, if its better then strengthen more. Something else to listen to are the war drums the closer the US gets to war it always strengthens the USD so if by some miracle they see fit to call off striking Syria that strength will go away. However I highly doubt that will happen and the drums will get louder and we will see USD strength.
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