Daily EUR/USD, GBP/USD Analysis January 22, 2013
So far on the EUR/USD nothing has really cleared up as to which way they intend to break this pair. It did turn at the 1.3332 level I mentioned in yesterdays commentary. There was also a set of good candle patterns to trade from for the short. The problem was there was an American holiday yesterday that neither of my news sources mentioned. I had to find out it was Martin Luther King Jr. day from a member. Having said that the holiday shouldn’t have slowed things down that much during the London session unless they are waiting for something to trigger the move.
Again today I will be keeping an open mind with this pair and watching for clues with the hourly candles and where they close during the first part of the London session. The levels really havent changed from yesterday with the 1.3332 being the first place I will look to short from and I will start looking at yesterdays lows of 1.3298 for a long. If we do get the hourly close in either direction I will be bias in that direction and look for the pullback and manipulation to trade with it.
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The GBP/USD did have a nice move in it yesterday and now has found the support I expected at the daily level of 1.5818 showing a nice 1 hour stop run below it. If its going to reverse the best chance it has is here. What I will be looking for is another stop run to the lows yesterday or even that daily support holding again. As usual if we get the hourly close below the 1.5800 level the odds of it breaking to the downside go up significantly. I would expect at least a shake out of weak shorts before it goes and we should see the false push up beforehand but considering the weakness of the GBP these days it may just keep on going. I will be keeping an open mind on this pair today with a slight bias for the reversal. As always the manipulation at one of the key levels will be the key to actually triggering an entry.
Forex News Today
Scheduled releases pick up a little today with the Euro group meetings finishing up along with ZEW Economic Sentiment from Germany and the Euro Zone. Both are expected to rise significantly and almost double the last releases. My thoughts are these have a better chance of disappointing than being a surprise to the upside but we never know. I will be watching for the manipulation afterward if I am not already in a trade. There is also a Super Mario Speech late in the day so keep that in mind while trading the NY session.
The UK has Public Sector Net Borrowing and CBI Industrial Order Expectations. I dont expect much from the the Net Borrowing without a large miss and the CBI figures are expected to remain negative. If there is a surprise to the upside here it will give them a reason for the reversal but it will need to be big enough to get into positive figures.
The US has Existing Home Sales expected to rise slightly. Again these housing numbers are a far cry from anything worthy of saying the housing market in the US is in full recovery so I dont expect much baring a large miss.
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