Daily EUR/USD, GBP/USD Analysis July 7, 2014
As usual for major US holidays we didn’t get much movement on the EUR/USD last Friday. They did show some conviction during the London session only to take it back just before the London close for the day. I would give a little more weight to the daily close below but in all reality it wasn’t that much and without the US participating its questionable at best. I do see the higher probability for the next push down today or at least finish the one started Friday but there are also a few significant daily levels just below the current lows that will take conviction to push below.
The best level right now for the short is up at 1.3609 considering its around 20 pips from current price. They may stop it at the 1.3600 level as well but I would be happier to see them try to push out all the weak holders trading last Friday. Otherwise if there is the conviction below the lows Friday and it don’t test the next level at 1.3575 then I will be open to short from 1.3600. Of course I will be also looking at how they play the breakout traders to potentially take the short from 1.3600. There is the slight chance for the long today but it will need to be a very clear set up literally screaming entry preferably from the Friday lows or if I miss the short I would prefer to see them run at least close to the ADR and look for the reversal after the third push.
The GBP/USD had the same short move Friday testing the overall highs before getting rejected to hit the daily level at 1.7139 closing the day flat. Since the gap at the open this morning has closed I wont be paying much attention other than potentially looking at it as a level later today. At this point I will be open on direction for this pair. The potential fake out on the NFP news Thursday tells me the higher probability is to push up but I will still be open for the short at the highs if they show they wont let it pass. The best level for the long is 1.7135 but if we get the conviction to the upside before running that low then the gap open and Asian lows become valid.
Forex News Today
The calendar is bare to start the week. At the beginning of the Frankfurt session there is the German Industrial Production figures but barring a very large miss it will most likely be used to manipulate before the move. Otherwise it could be another quiet day since lately they haven’t been moving much without some news to help push.
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