Daily Forex Analysis EUR/USD, GBP/USD November 6, 2012
The EUR/USD did not give the deeper pullback as I expected yesterday and was pulled down with the GBP/USD as it made its third push. I did have thoughts that might happen but since the GBP/USD was at a daily support level it seemed more probable that we would see the deeper retracement before the next push.
Now the pushes are more clear even though this last push was only 75 pips on the Euro. Since the ADR is still hovering around 83 pips a 75 pip push does qualify. Today I will be looking for the reversal. I would prefer to see an hourly stop run to the lows but we may not get that considering we have a bottoming formation started. Yesterday it tested a daily support level from September. This would be the best place to see the stop run below 1.2753. If we cant get that a nice clear trap to yesterdays lows will be good enough to get me long with a good entry close to 1.2766
The GBP/USD as I mentioned earlier has made the third push down and I will be looking for the reversal here today also. The bottoming formation is less clear with the close (by a half pip) below the first pin bar at the lows of the day. However we are seeing the trapping candle formations at those lows on the hourly chart with the pins and a set of reversal legs. My bias will be long on this pair today. The level to look for that entry will again be the lows from yesterday at 1.5955. Having said that since we have the trapping candle patterns already on the hourly chart we may not see the lows if the trap has already been sprung. At this point I will be considering the potential of only seeing the stop run to the Asian session lows but of course I will need a good set up on the 15 minute chart to enter.
To Learn More About Our Advanced Bank Trading Forex Course, Daily Market Reviews, Live Forex Training Room, and Members Forex Forum Please View Our Advanced Bank Trading Course Here.
Forex News Today
The news calendar looks busy but most of the events are medium impact. The ones to watch that may have reaction are the Spanish and Italian Services PMI figures. They are well below the 50 expansion level but a large deviation to the downside will probably create some volatility. Later in the day there is also German Factory Orders expected to be negative again but not quite as bad as the last release. If we do see a disappointment showing that Germany is getting hit harder (of which it should) by the recessions going on around them it will be Euro negative
The UK has Manufacturing Production expected to creep into positive territory. However with nothing getting better in Europe there is room for disappointment here also.
The US has the Presidential Elections that will be dominating the media and may have an impact on the markets depending on how close they come in the exit polls. If there is a chance we have a scenario like what happened at the Bush/Gore elections then things could get dicey rather quick and the markets may get whippy over the days ahead as they work on sorting it out.
If you havent already read the latest article Sterling posted I recommend you do so. This was a great article in response to the many emails we get asking if what we teach can be used while having a full time job and limited screen time. Its called Trading Forex Trend Reversals – End Of Day Forex System. Sterling goes into great detail of what to look for and catch the reversal of the smart money trend.
Do You Enjoy The Daily Forex Commentary? Please Click The Like Buttons, Tweet It, and Google + It Below !!