EUR/USD, EUR/JPY, GBP/USD FX Commentary March 29, 2012
Hi all. The EUR/USD and GBP/USD seem a bit confused on direction with the Euro dropping back and finding support on its previous level 3 price action and the Pound dropping back into its level 3. As I mentioned last week there was market chatter about many stops being above the 1.33 level on the Euro and the Smart Money would probably like to hit them. Then good old helicopter Ben gave them a good reason go up and get them. At this point it dont look like the market took Ben seriously and is hesitant on any more pushes to the upside. Today I will be treating both these pairs as in level 3 again since the price action as this is how typical level 3 looks and could go either way at this point. The hourly EUR/USD chart below shows a clear topping formation also. This shows a little more bias to the downside but not enough to say thats all I will be looking at today. If the manipulation out of Asia is to the upside then I will be a bit happier. However it is entirely possible that we chop around in this 100 pip range for a few days.
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The GBP/USD does have a tad bit more clarity with it closing back in the level 3 PA . However direction is still up in the air for today. We will not know that the market has reset until it moves off to the downside out of this level 3. So this pair will traded carefully today also.
The EUR/JPY does show slightly more clarity with its 3rd level PA having a head and shoulders pattern that is typical of level 3 also. The chart below shows 2 intraday levels to the down side so the third should be in the works but may actually happen during Asia so the London session may still be questionable. We will have to wait and see.
In the news today there is only German unemployment numbers that are expected to drop 10K. (Germany employed 10K people last month) Which I expect to be close. Germany has been creating jobs consistently so I dont expect much of a surprise from this and even if it did the chance of it moving the Euro substantially are low since the ECB dont even peek through the window at unemployment numbers. Unlike the Fed as it is part of the mandate.
There is a few goodies from the UK though with some MPC member speak, BOE Credit Conditions and Net Lending to Individuals. I dont really expect much movement from these either unless the MPC Fisher drops a tape bomb or two.
The biggie for today is the US unemployment which is expected to rise and the Final GDP numbers. These both could cause some risk off action if they disappoint in a large fashion. So watch out for those.
There was a comical picture of Bernanke I found that I thought you all might enjoy. It sure looks like these guys got him pretty much nailed from all perspectives. Hope you get a good laugh as I did.
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