EUR/USD, GBP/USD Analysis January 21, 2014
The EUR/USD did not get the third push yesterday but considering how the have moved price during the last four trading days I still have the bias for it today. The conviction during the Asian session yesterday proved to be false but seeing the lower close negated any bottoming formation. All this adds more to the probability we will see the third push today. On top of all that with yesterday being a bank holiday in the US the likelihood of seeing the move during the US session was low to say the least. I did take the nice trapping pattern we had yesterday short from 1.3554 and held it for 3 hours with no move closing a couple pips down. Good job to those I saw take the trade in the Skype group. It was a beautiful set up and gave a great entry, however due to the holiday didn’t move off.
The best level for the sort today will be the yesterday highs of 1.3567 and with the Asian range at a decent with already this morning it has a good chance of being where they turn it if price don’t leave the Asian box at the highs. If it does then they will likely test the 1.3580 level before a move off. If it does make the push today having the daily close below the recent lows the next significant daily level is down around 1.3428 leaving the possibility for an extended move today or later during the week after a reversal to try and clear weak holders.
The GBP/USD had more of a choppy price action yesterday hitting the 1.6451 level to the pip almost and turning off a nice holding pattern and not going much of anywhere also. This does increase the chance of the push up off the Retail Sales data last week being false but it is best to keep an open mind on direction. The support at the hourly 200 has kicked in this morning holding the Asian range tight so far. The best level for the short is still 1.6451 but I it can get some conviction below the current Asian lows during the London session the 1.6437 level has a higher probability for a turn. Otherwise if price leaves the Asian box close to todays highs they will most likely test higher before a move down. I will be open for the long here also but want to see them test the 1.6400 psych level during London. Although the 1.6414 level has good potential but due to the close proximity to current price I will want to see that they clearly wont let it pass there after playing the breakout traders to the Asia highs.
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Forex News Today
The Economic Calendar is slow again today so barring any tape bombs or big misses on the ZEW Economic Sentiment from Germany and EU we shouldn’t see much they can use to manipulate with. Otherwise I will be keeping an eye on those during the London session.
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