Daily EUR/USD, GBP/USD, Gold Analysis May 23, 2014
The EUR/USD hasn’t quite finished the third push as of yet so I am still holding my short from 1.3684 I took just after the live London session closed yesterday. At this point being its Friday I don’t expect a whole lot from it but figure its worth the risk to give it a chance today. I wont be holding it over the weekend because that would be too risky so this morning I have moved my take profit out of proximity and will be watching periodically for a break below the recent lows. If they do make a push there is a decent chance it run to 1.3600 or lower if we get a tape bomb of sorts.
As for taking an entry on this pair today I will be looking for a test of 1.3661 or just below at 1.3658 with a clean set up to take a short or wait for the third push to complete looking for a long somewhere around 1.3615-20 range. I wont be adding a position to this pair today but will be happy to take a long after exiting my short for the reversal while looking at others to try and catch a good end of the week trade as well. Of course I will be particular as usual with one potentially good profit trade running.
The GBP/USD has shown me that the first push up was most likely false but with only an intraday push to the downside I will only be slightly bias for he short today. I would have been happier if they did show daily conviction below the support level at the end of the NY session Wednesday which would add to a bias for the short today. Even then I would still be open for the long though. The best level I see for the short is 1.6876 which has the psych 80 level just above. Otherwise if they show some conviction below yesterdays lows during the London session I will consider the Asian highs for the short as well. The level I will be open for a long is at yesterdays lows where the hourly 200 sits just below. With the strength of the GBP we have seen lately they have a good chance of holding it there since it has been getting decent respect recently also.
Gold did go up and test the upper level at 1.1303 yesterday for a nice confirmation entry short during the NY session. There wasn’t a pullback which I do prefer for entries but I hope some of our more aggressive members caught that for a nice run down. Today I don’t really expect much movement from gold but will be watching the same levels as yesterday. I still think the probability for the break to the downside has a higher probability so would prefer a short but if there is a clear entry at the lows around 1283.32 I would be willing to take a low risk long.
Forex News Today
The London session has some big German news that could make the push on the EU for me. Early is their GDP figures and my thoughts are there is a better chance for a disappointment than a surprise to the upside considering German data has seen some disappointments. More than likely it will be close or as expected. Otherwise there is also their IFO Business Climate expected to drop slightly. A disappointment here should also weaken the Euro.
The US has New Home Sales a couple hours before the London close. Expectations are for a bump to 425K but if the Existing Home Sales yesterday leaves any clue this will miss to the downside as well.
Have a great weekend
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