Daily EUR/USD, GBP/USD Analysis April 11, 2014
With the EUR/USD going in to extended pushes yesterday the way we have to look at it is that the reversal could happen at any time. The simple reason is that if they don’t try and push weak holders out of the market with a false push down then the probability for seeing the nest two pushes up from here goes down somewhat. Yes it shows conviction in that they didn’t even close the inefficient move from the Fed Meeting Minutes, however that is not enough to build a clear bias for the next push up. At this point the safest way to treat this is open on direction either taking the short from a stop run to the highs yesterday or the long from the lows.
There are a couple ore levels I will consider the long from but they will be considered more aggressive entries so I will be particular with the set up ad entry. The best level would be the 1.3854 considering its proximity to current price. However if they do show conviction above the highs during the London session I will consider the 1.3871 or potentially the Asian lows.
The GBP/USD did get the reversal moving down 66 pips from the highs created during the Asian session. Since it didn’t move down far enough for a first push long term and it being Friday I will be keeping an open mind on direction for this pair also. Again the safer trades will be from the high or low yesterday but I will also be open for the short at the 1.6800 level that has the confluence of the daily level from Wednesday.
Forex News Today
The calendar is rather quiet today until we get to the US session where they have PPI data early on then Michigan Consumer Sentiment around an hour and a half later. The inflation data has a chance to surprise since its expected to get just above the big zero level. If it does disappoint then they will be getting a bit freaked out about deflation but whether it has an impact on the future of the Fed print fest is something I doubt. Consumer Sentiment is expected to improve but with this piece of data being sold to the big boys way ahead of the release I can only assume that it will already be priced in and not do much on a big miss.
Have a great weekend
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