Daily EUR/USD, GBP/USD Forex Market Commentary August 31, 2012
Its time to celebrate guys. We are finally at the end of this crazy month. Even better I managed to catch the GBP/USD 1hr stop run last night and woke up to a 90+ pip move. Of course I debated setting the take profit at 50 pips like I said was the safer move in the live forex training room but as I also mentioned if there was a trade I would be willing to hold going into the Jackson Hole event it would be a short. Needless to say I left the profit target open and closed the trade this morning for 75 pips profit. Not a bad end to a crazy month.
My reasoning why I would have been willing to hold the short is I expect a disappointment from Bernanke. I totally expected the range to hold for yesterday though unless we got some sort of tape bomb and sure enough we did but it came from the ECBs Asmussen reiterating that the ECB will only buy bonds after a formal request for aid (bailout) Meaning harsh austerity which Spain narrowly missed with its first 100 billion Euros and is why they are trying to avoid asking for the aid at all costs right now. We are in for an interesting September guys.
Today I am taking the day off. I dont want to watch the paint dry for most of the day waiting for Ben to dump his load of crap on us. I have more pleasurable things to do like playing with my 3yr old. However I will let you in on what I would be looking at today. The EUR/USD is in crazy mode but has made the significant push down and the higher probability is it will continue. As I type this its making the pullback to Wednesdays lows and if that holds during Asia then a stop run to that level during London would be a nice place to short. Having said that the chance for a deeper pullback is there as the smart money positions its self for the Bernanke bucket dump. If we break that level and keep heading up the breakout level around 1.2536 would be the next place to look for the trap move. Oh I almost forgot, good job to you guys who caught the Euro short as you know I was enjoying my daughters day as Queen and was well worth it. For those who had the patients to hold on it payed off nicely.
The GBP/USD seems to be the weaker currency pair today. I would have expected the hourly reversal legs to provide a deeper pullback than it did but it was halted by a 1 hour pin to the hourly 200ema. This may be as far as it gets today but the chance for a stop run into Wednesdays lows is possible so be careful of that.
Forex News Today
Scheduled releases do look sort of busy today but they all will be taking a back seat to the Jackson Hole event. The ones to watch for some possible manipulation are the German Retail Sales, Euro Zone CPI Flash Estimate and Chicago PMI from the US. All these are scheduled to be released before Ben Bernanke speaks.
Have a great weekend
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