Daily EUR/USD, GBP/USD, Gold Analysis June 27, 2014
With the EUR/USD holding the range yesterday and a clean intraday push down I would normally have the bias for the next push. However since its still in the range its been holding for the last six trading days I will still be open for the long today. Also since there hasn’t been a decent move over the week, the end of week flows should not be a concern but there is potential that they start the end of month exiting of trades early. Therefor I will be more cautious taking trades in the middle of yesterdays range.
The best levels for entry considering distance from current price are 1.3640 at yesterdays highs for a short and 1.3583 where Tuesdays lows are for the long. There are the levels in the middle that carry more risk like 1.3626 (short) and 1.3600 (long) but in order to have confidence in a trapping pattern there it would be best to see them at least attempt to hit one before testing the other. For example pushing close to the 1.3600 during Asia or early London before running to the other as they suck traders in the market in the wrong direction.
On a side note for members. Yesterdays move was a great example of how the hourly conviction telegraphs the next move with high probability along with the next level it will likely test. It should and would have saved me from taking a full hit on the Long I took during the London session room had I not had to leave my desk. Good job to those who saw it and dint take a full hit on the trade (Joey) :). I would like to hear from other members that also saw that so please shoot me an email over the weekend so I know all of you understand.
The GBP/USD made a push upward thanks to the BOE Carney speech I mentioned in yesterdays commentary. As we were discussing it during the London training session I was telling members the probability of him trying to give a bit more credibility to his “rates will rise sooner than many expect” speech from a June 12th. Since then he has had a little foot in mouth sickness along with the conflicting speech from Bean the other day causing him to step in and try to back up the original speech more. Therefore the higher probability was for him to do his best to save face and do more to pump the original speech. Well he did and we got the move on the EUR/GBP going 1.5 times its average daily range while the EU and GU run opposite directions on the day. Go figure.
Today we have the push upward but being Friday and close to the end of the month the bias for the long will be a little weaker. I will be even more cautious if we get conviction during Asia for a potential fake out. I have my doubts that will happen if they really intend on the next push but anything is possible. The best level for the long is down at 1.7002 but if we get the conviction in early London the current Asian lows are valid or even the 1.7030 if they run it up without testing the 1.7048 level. Otherwise I will only look to short if they show they wont let it break yesterdays highs.
I also want to send a shout out to Chrissi on her 50 pip GBP/JPY long trade. GOOD JOB
Gold is still stuck in the range but now has what I see as another fake out to the lows. The original push down thanks to Carney was quickly rejected when the US Unemployment data came out showing that they almost had enough to start the smack down but couldn’t muster the troops together enough to support them for the break. The question now is can they get support for a break down before everyone realizes that the UK cant raise rates any more than the US can? It will probably take awhile for that to sink in so at this point anything is possible.
Forex News Today
The calendar is slow today with only French and UK GDP figures being released during the London session. The French data shouldn’t have a big impact if it don’t miss big. However a drop below the expected zero figure could make them run stops on the EU. Otherwise the UK release has a bigger chance of surprising to the upside and fueling the up move if the housing bubble is really expanding GDP. I see it as more likely than not so I will be looking for the clear set up before the release.
I will spare everyone my disappointment in the Michigan Consumer Confidence data being sold to the highest bidder this week 😉
Have a great weekend