Daily EUR/USD, GBP/USD Analysis September 17, 2013
The price action on the EUR/USD hints more of the gap up being a fake out due to the Summers news and now have almost retraced the entire gap. I am sticking to my assessment that the Fed will taper tomorrow but it wouldn’t be the first or third time I have been wrong about what Bernanke does. Of which leaves it open today as to what the big boys do regarding a push. The safest thing would be for them to hold price but depending on how they are positioned we might just see some profit taking on this run up over the past week or so and get the push to the downside. Therefore today I will be keeping my mind open on direction with a slight bias for a push down. Having said that I will be keeping in mind the fact it has a good chance of just chopping today due to the news tomorrow.
The best level I see for the short is 1.3354 with proven resistance but if that breaks with conviction I will wait for the test of yesterdays highs and considering the close proximity it has a good change of breaking unless we get the push down first during Asia. On the other side of the coin we will need a push to the upside and a very nice trapping pattern at the highs last week for a long. What would be optimal is to see the test during Asia with confirmed support then the push up and stop run during the London session later today.
The GBP/USD is showing pretty much the same price action as the Euro but with the extended push Friday last week the probability should be to the upside unless we get the third intraday push down proving that the gap up was a fake out just like we may have with the Euro.
The best levels I see are the 1.5920 psych level and the highs yesterday for the short again with the problem of the proximity of the lower one. Again here I would prefer to see that third intraday push form and potentially take the short from 1.5920 or the Asian highs but will be open for the long with the right price action. Meaning a clear stop run to 1.5867 or lower. At that point I will be trading against that first push so the trap will need to be clear and I wont be holding for the longer run.
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Forex News Today
The calendar starts off with UK CPI data expected to drop a notch. I don’t expect much from this unless it misses to the downside and if it does we will most likely see GBP weakness or even possibly get the push up before the release and then a drop on a lower print. Thirty minutes later is the German ZEW Economic Sentiment expected to get a good boost from 42 to 46 so as long as its close we may get Euro strength. However if the taper expectations are prevalent then it wont last long.
The US has Treasury Secretary Lew speaking which I don’t expect much from unless he brings up anything about the debt ceiling and surprises the big boys. They also have CPI data expected to rise but remain below 2% annually so barring a jump above the 2% threshold we probably wont see much there either.
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