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Both EUR/USD & GBP/USD Have Late Day Sell-off – August 5th 2015

August 05
05:40 2015

Nothing really exciting to rant about today so we are just going to get into today’s levels and a coverage of yesterday’s market.

EUR/USD Drops Late New York & Continues Early Asia

Both the Euro and the Pound made a late day move to the downside. At this point however, I have a completely different bias with both pairs longer term. With the Pound I still have a stronger bias for a reversal to the upside as the end of the week approaches. When positive data is expected the market will often sell off in front of it to allow for better positioning going into the actual data. The Pound has expected good data on Thursday so that may be what is occurring. The Euro however, does not have the same thing going for it and today I favor the continued push down. Today I will be looking for that continuation down with only one lower level that I would consider going long from should a long trade setup from that point shown in the chart.

Today the Euro did not provide a setup as the market only had a 40 pip range during the trading hours that we use. If the market does not come into a pre-selected manipulation point then it is an obvious no trade. As I always say to members, don’t force trades. Traders don’t lose money because they take too few trades, they lose money because they get bored and start taking stupid trades. If you eliminate the errors then learning to trade forex successfully becomes much easier.

EUR/USD Chart - August 5th 2015

GBP/USD Remains In Large Multi-Week Range

The Pound has been in a fairly tight range since mid July. Unlike the Euro I still favor a move up on the longer term perspective with the Pound. I’ve talked about this since the beginning of the week with the COT data showing more positioning to the long side on the Pound. The price action has not followed through with the overall positioning this week as of yet. That is however not unusual early in the week, especially with positive data expected later this week. Much like the price will be driven down first before pushing the price up for that day, something similar happens on a longer term perspective. Early in the week the price will stay sideways or even slide down before the push up occurs, if in fact that is the direction the market is going to be taken.

At this point my trading will be the same as yesterday. I will be open on trade direction from any of the listed manipulation points with a higher bias to the push up. The only issue with getting a long position on the Pound today is the lower levels we have to choose from. You will notice in the chart that I only have one lower level from which I will be looking to go long from. Additionally the level is quite a distance from the current price. While we may have new levels form throughout the day, this is the only level at present. If we are going to see some further continuation down we have a quite a few upper levels from which I would consider a short position from.

GBP/USD Chart - August 5th 2015

Forex News For August 5th 2015

UK  Services PMI 4:30 AM Eastern: This piece of data can definitely make a large spike in the market with a deviation of 1 +/- from the expected number. While the spike may be consistent the follow though is not. The follow through on this news has been very inconsistent with well over 60% of the news actually getting reversed after the initial spike. This month the news is expected at 58 even.

US ADP Non-Farm Payroll 8:15 AM Eastern: US ADR has seen a big improvement in movement over the last 6 months. This month the news is expected at 215K and any deviation of 20K +/- will not only create a 15+ pip spike, but it will also have great follow thought for the next few hours more often than not. 

US ISM Non-Manufacturing 10:00 AM Eastern: Another piece of US data that has seen a large increase in attention over the last 6 months. While it is capable of creating a spike of 15 pips or more, it has very inconsistent follow through over the next few hours. This month it is expected at 56.2 with a deviation of 1 +/- being required to create a large spike.


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