Conservatives Well Ahead In UK Exit Polls May 8, 2015
Exit Polls Show Conservatives To Stay In Control Of UK Government
I should probably stress that these are just the exit polls from the UK election but typically these are pretty accurate in the UK and there is really only cause for concern if the race is very close which would mean there is a possibility of an exit poll or more that are wrong potentially having a large impact as the official tally comes in. In short this is what Goldman calls the most market friendly result and of course the GBP soared having already blasted the average daily range in the first hour this morning. Below is Goldmans take from yesterday.
EUR/USD Gets Full Reversal
The EUR/USD started the nice reversal I expected yesterday that even got started well before the UK election results came in. I do expect this will continue today and will be bias for the short. The best level considering proximity is up at 1.1282 but if they do manage an early drop thats not false conviction then I will consider the breakout level at 1.1257 during the London session today. Otherwise being a first push situation it does leave me open for a long at the Asian lows but only seeing clear price action showing there arent any sellers below to change my bias.
GBP/USD Blasts Off On UK Exit Polls
This move on the GBP/USD on the election results does constitute a third push (plus some) and considering the inefficiency along with the volume and time of day there is a much higher probability of a reversal today. The best level to test is down at 1.5292 but if they do have that much conviction then it will hold somewhere in between. The best level for the short is up at 1.5420 but if they continue to drop it during the Asian session the probability of it getting there for London is low so in that case I will look for hourly conviction below the Asian lows to take the back side short. Otherwise I will be open for the long at the Asian lows as well but will need to see a rather convincing set up to get me long.
EUR/JPY Runs Reversal With EU
The EUR/JPY ran off with the EU yet again more or less ignoring the long term pushes so as you can see I have changed the lines that show the most probably way they are running this pair. This is likely to continue with all prospects of the BOJ stepping in again being minimal. In short they are happy running intraday pushes with this pair and only trading on the Yen with the UJ holding it back sometimes. I will be bias for the short here today with the best level being at 135.08 however since they have already widened the Asian range substantially I will be open for the short at 134.78 as long as it holds steady during the Asian session and they leave the Asian box closer to its lows. I am open for the long at 134.34 but I will need to see cooperation from the EU showing enough to change the bias.
Forex News Today
The news releases start off with German Industrial Production and Trade Balance early on. However with it being NFP day it will take a large miss to get them pushing the Euro around. Ind. Prod. is expected to rise slightly so my thoughts are a disappointment below zero or a significant surprise upward has the best chance for starting a potential push.
The UK also has its Trade Balance but typically this release dont get them moving unless it misses huge and again will likely be ignored on a small deviation on NFP day
US NFP data is expected at 224K. A substantial improvement on last months dismal disappointment. At this point its not worth guessing but if it does disappoint then the USD will be hit probably harder than last month. The Unemployment Rate is expecting a drop but that data is pretty much worthless these days. If NFP dont miss to the upside then it will likely be ignored.
Have a Great Weekend
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