Daily EUR/USD, GBP/USD Commentary May 24, 2013
Looking at the move on the EUR/USD yesterday my first thought is that we have a first push up. However after the push down Wednesday this looks more like a third push chop even if they are fairly large moves. Therefore I will be open on direction and look for a strong hourly close during the London session to make it more clear. We already have a 32 pip move during the Asian session while the 15 minute 200 EMA is finding support so as long as that holds until London opens I will look for the short if London makes a decent hourly close below the level and trade the manipulation against it. Otherwise the same will hold true for the Asian highs but with a couple levels along with yesterdays high right behind it the 1.2946 level seems to be the best level to be watching today. As usual when direction is not clear I will be open for a short with a stop run to the highs yesterday.
I will also be keeping in mind that the NY session will be cut short due to the Memorial Day holiday this weekend and the move will most likely happen during the London session. There could be some volatility during the NY session due to low volume and some high impact news events so those members who trade the US session should be careful and pay attention to when these events will be released.
My concerns that the GBP/USD being at a significant daily level were proven correct even though it made me wrong about my thoughts they would push it down yesterday. This is precisely why we cant trade on what we think the market will do and let them show us their footprint. Its too bad the hourly closes that showed their hand yesterday were not convincing enough for me to create a long bias but that’s what we have rules for. These rules will keep us out of more bad trades than we miss good ones which is why we always stick to the plan. I didn’t get a trade yesterday but I also didn’t take a hit. 🙂
The situation is pretty much the same as the Euro today and the safer way to approach this pair is be open on direction. I have the 1.5100 level marked but in order to use it as a high probability level fro a short I will want to see it tested during the Asian session and hold. Otherwise a stop run to yesterdays highs is a preferred level to short from. The 1.5053 level has potential for a long and seeing the stop run there is preferable I will be open if I see clear trapping patterns and a good entry. If we see an hourly conviction close beyond the probability of price moving that direction goes up substantially.
Forex News Today
The calendar today starts off with German GDP figures when Frankfurt opens. Expectations are for 0.10%. If this misses we will see a big move early on that we may be able to trade against or give us a clear bias on direction. It depends on how big the miss is and direction. If it does pop into negative territory the chance for a more sustained move will be higher than a miss to the upside. Later is the German Ifo Business Climate Index which could also create some movement but will lower if GDP misses to the downside.
The UK has BBA Mortgage Approvals which probably wont do much without a big surprise.
The US has Durable Goods data and with New Home Sales data surprising to the upside yesterday this should be as expected or better and may create some US weakness if it does. Keep in mind the US session will be slow so a surprise here has a chance of making a larger move on low volume.
Is This The True Reason Stocks Are At All Time Highs?
This week I will leave you with a good video from Max Keiser that shows the clear reason why the stock markets are at all time highs. As Max calls it A Ponzi Scheme and I couldn’t agree more. Here we show you how to trade the manipulation of the fore markets and as Max in his usual over the top fashion describes that they are pushing price higher to cash in their options. Market manipulation to benefit the rich at its best guys. Enjoy
Have a great weekend
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