Daily EUR/USD, GBP/USD Analysis January 9, 2014
The Fed minutes yesterday proved to be a non event other than hitting the USD index pretty hard. otherwise they were happier with the jobs market for some reason. Its a wonder to me how they can think that having three part time jobs and no benefits can be positive for the jobs market. In reality their new found transparency or really more of the same double talk was taken as “well we would like to keep the taper going but if things get worse it wont happen”. It sure looks to me like most of the big boys didn’t buy it and expect things to get worse.
The chart of the EUR/USD shows the potential for a first push down after the chop but considering the nice bottoming formation at the lows and holding above the 1.3570 level it has a higher probability that this is the finishing third push we were expecting on Monday. I never like it when they work it like this over 5 days but e have seen it many times before and more often than usual. Therefore today I will have a small bias for the reversal. I will prefer to see a stop run to at leas the 1.3560 level but if they work the Asian range nicely then I will be open for the long at 1.3570 or the Asian range lows depending on the price action. My thinking is they most likely cleared out stops below 1.3570 yesterday during the NY session and there wont be many for them to get today. Otherwise if I miss the long I will be open for the short around the 1.3600 level but the et up will need to be very clear and I will be cautious watching if I enter short due to the higher risk of taking entries in the middle of the chop.
The GBP/USD had the opposite move for the potential first push upwards from the chop but not having any conviction higher than 1.6473 concerns me. Having said that there is not a nice topping formation so my bias here will be for the next push up also. The best level for the long is 1.6432 or just below at the hourly 200 ema. The potential for the short at the highs is there but I have my doubts they will give me a good reason to change my bias. If they do hold the Asian range and widen it to the upside then they may run off from a bit higher level so I will be watching for that also.
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Forex News Today
Big news today starts off with Interest Rate Decisions from the BOE and ECB. Of course they will most likely be non events as usual and the big boys will wait for the ECB press conference and Super Mario to have his say. Otherwise there is US Thursday Unemployment data but unless it misses very big then it will be trumped by the Draghi speech and questions.
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