EUR/USD, GBP/USD Analysis August 2, 2013
We got another lesson in whip saw from Super Mario yesterday. However by the looks of the hourly chart today it sure seems as Bens whip is much bigger than Marios. I just had to make that joke considering that I did expect some what of a Euro pump from Draghi but thought it would have more effort than what we saw.
Today I expect to see some of the normal Friday flows and may not go much of anywhere but will have a slight bias for the next push down. having said that it is the most important news day of the month with US Non Farm Payrolls so the chance of seeing much movement before then just wen down substantially. Asia has been open for a couple hours now and has only produced a range of 11 pips so far. I expect they will be holding off as nobody wants to be the tall blade of grass that gets cut first.
With the daily close slightly below Wednesdays lows it does have a good chance of running to the next daily support at 1.3176 but since that is only 30+ pips away at the moment there may be some desire to push some weak shorts out of the market first. If that is the plan for today (which could easily have been tossed due to NFP) then they will most likely try and push to at least 1.3229 or even 1.3250 before they make the push. I will be keeping open for a long but yesterdays lows are really at a very significant daily level so the probability of them holding goes down. Therefor any consideration of a long will need to be screaming they wont let it pass below 1.3193.
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The GBP/USD looks more like they have flushed out the weak holders already and primed for the next push down. It also has the daily close below Wednesdays lows telling us the daily pin bar Wednesday was a fake out of long term traders. The problem with this pair is the significant levels are within close proximity to price. Having said that if the have got the weak holders out of the game they wont need to induce much buying to accumulate their position since its quite possible they did most of that yesterday. The wild card again is being NFP Friday we may not get much for movement before the US session so it has potential to be a “watching paint dry” trading day.
The best level I see for the short is 1.5332 but with it being so close to current price it would be best to see an hourly close below yesterdays lows during the London session to give it more probability of holding as the manipulation level. Otherwise if there is no conviction to the downside they may just push it to 1.5161 or higher if they weren’t able to push enough shorts out of the market yesterday.
Forex News Today
The calendar is rather bare until US Non Farm Payrolls and Unemployment Rate. It does surprise me that they expect the Unemployment Rate to drop a tick at the same time NFP expecting a 10k lower print so be careful for conflicting releases if your trading New York today.
Have a great weekend
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