Daily Analysis of EUR/USD, GBP/USD, Gold June 24, 2014
The EUR/USD didn’t really go anywhere yesterday, only moving 40 pips from the daily range. I did catch the short when it hit the 1.3612 level and gave a very nice trapping pattern. However as I said in yesterdays commentary it wasn’t a great level so I waited for more signs they didn’t want to push it higher and entered after they showed that a couple candles after the great set of legs. I am still in and holding since they did come back and just missed my break even stop by just two pips and my spread late yesterday.
If they do knock me out, which is looking probable, I will be looking at the same 1.3612 level for the short with no bias on direction today. Seeing them widen the Asian range would be better before testing yesterdays highs or they will probably break it to the upside for a test of the recent highs. The level I see best for a potential long is yesterdays lows but if they do show conviction above 1.3612 then I will be open for the long at the Asian lows if they keep the tight range. As long as I don’t get hit break even I will just be holding and managing the trade I am in today.
The GBP/USD made a similar move testing Fridays lows getting rejected as well so I will be open on direction on this pair as well today. Again the highs of 1.7058 and low at 1.7002 will be the safest points of entry but I will consider the short from 1.7043. At this point they seem to be loading up more for the break of recent highs or at the very least clearing out all the selling if they do intend to break it higher. It just doesn’t seem as though they have much interest in pushing it down quite yet but we will know more if they push down and get the daily close below 1.7000.
With the even tighter range in gold nothing has changed either. The safe entries are at the high/low of the range. My thoughts are it will break to the upside one more time at least before they attempt a smack down of sorts. The question in my mind is. Are they tired of losing their butts trying to suppress the price yet? Well with an endless supply of money that answer would be NO. Which is why I expect at least one or more attempts at a smack down. Having said that we do have the IMF pressuring the ECB to go full print mode again which is why we should see the break up before any smack down. This wouldn’t be the first or third time the IMF has put the pressure on the ECB but with all the rhetoric of them preparing the press it shouldn’t be long before they do. Again the wrench that’s holding the ECB from printing is the Bundesbank but they are close to capitulating. Then again here is a reminder of how the banks work courtesy of Zero Hedge.
Christine Lagarde of the International Monetary Fund has told the European Central Bank that they need to consider Quantitative Easing if inflation continues to remain low, which it will. She stated: “If inflation was to remain stubbornly low, then we would certainly hope that the ECB would take quantitative easing measures by way of purchasing of sovereign bonds”.
But, hang on a moment! Isn’t that against the statutes of the European Central Bank? Doesn’t the ECB have a clause saying that it simply can’t provide monetary finance to governments? Oh, well, never mind. Since when did any bank, central or otherwise, play by the rules. The governments put the people there into power, so they can certainly return the favor, can’t they?
Remember when all is said and done that 60% of the trades done on the stock market every single day are just for the wealthiest 5% of the world. Yes, the 95% of the other poor devils that think they are controlling the financial markets through their buying and selling of shares have absolutely no idea. Christine Lagarde’s advice on the benefits of Quantitative Easing can only be of major benefit to the 5%. There’s really no need to wonder why the rich have got richer around the world.
And there we have it. Gold will rise but will depend on just when (not if) the ECB goes full blown retard. Having said that there is a few weeks until the next meeting when they will most likely announce it so it wouldn’t surprise me one bit if they do a smack down before so they can try to get better prices on gold themselves.
Forex News today
The calendar starts with German IFO Business Climate figures expecting a slight drop. A miss to the downside here will be more fuel for the QE fire while I think it will need a bigger improvement in order to make them think the Buba will stand in the ECBs way on printing.
Thirty minutes later is a BOE Carney speech in which I expect him to reiterate the rate increase dribble. If he does they will likely break the yearly highs or at least attempt it on the GU. If not the GBP should weaken.
The US has a Fed member speech but will probably be ignored unless he surprises which is unlikely. Later is CB Consumer Confidence expected to rise slightly. As long as it don’t miss big they will be looking at the New home sales data released at the same time. Since the previous existing home sales data was better than expected (for the rich) then this has a decent chance to improve. However when looking at the reaction due to the details of Existing Home sales any improvement will likely be ignored if the fine print reads close to the same.
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