Daily Commentary EUR/USD, GBP/USD January 10, 2013
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The price action on the EUR/USD yesterday was typical for the day before the ECB rate decision and more importantly press conference. However it did give the hourly close below Tuesdays lows show conviction to the downside. I would have been happier to see that happen at the beginning of the London session rather than close to the New York open but they almost never do what I want. 🙂
Today I will be being cautious with my bias and keeping my mind open on direction. The best case scenario I see for a high probable entry is watching the hourly candles for a close beyond a significant level or the hourly stop run to one of those levels. Right now the lows from yesterday at 1.3036 is whats in closest proximity but since this is ECB day we could easily see the run to the US market highs of 1.3077 and see the hourly stop run there. Otherwise the chance that we just see it bounce around in a tight range all day until the press conference is rather high. Of course the BOE could stir things up sooner with a surprise of their own so I will be watching that close too.
The GBP/USD has not convincingly made the hourly conviction close below the 1.6007 level I mentioned in yesterdays analysis. At this point I am considering it as a no particular bias today also. It sure looks like the push up was false but without some clear confirmation of that I cant justify having the short bias today. The level I will be watching first off will be yesterdays lows of 1.5990. A close below that level will show true conviction since there was a small close below 1.6007 that wasnt very convincing. Otherwise a 1 hour stop run above the highs during New York yesterday at 1.6031 will be a good opportunity to short also. There is proven resistance there along with the breakout yesterday just above showing the breakout was most likely already tested.
Forex News Today
Big news today starts with the BOE Asset Purchase Facility, Official Bank Rate and Statement. Nothing is expected to change so everyone will be watching the statement in regards to the Asset Purchases. If they talk of slowing them or anything definate on not adding to them it should be GBP positive but how much remains to be seen. The latest chatter was talk of just how much good they are doing so its a 50/50 chance.
Then Super Mario gets his shot to rock the boat with his Press Conference. I should say there is a slight chance he may cut rates but I doubt it myself. If that happens the Euro will drop across the board but like I said its not that likely. The Statement and Press conference will be scrutinized for hints on what he may do in the future but just like the Fed he is already all in so its hard to say. It would almost seem like there has been a gag order on press releases from Finance Ministers and the like since there hasnt been much said lately so this could easily be a non event or wild and crazy. 🙂 Just be careful today guys
More Rick Santelli
I found this video this morning and had to share it with you all. Whats great about Rick is he doesn’t pull punches and tells it how he sees it. In this clip he makes the clear point that the US government gets it wrong quite often by trying to fix a problem without even looking at what caused it. In this case its using the stock market to guide decisions on the massive bail out and what they have done to help the US economy. All of which haven’t really done anything but prop up stocks after a few trillion have been spent. Go figure. I think my 11 yr old does better math. Enjoy.
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