EUR/USD & GBP/USD Come To A Decision Point – September 30th 2015 Forex Commentary
EUR/USD Remains Strong
Today’s review is going to be short and sweet. Essentially both the EUR/USD and GBP/USD are coming to a decision point. In reference to the Euro the price has gradually been channeling up towards that 1.1293 level again. Essentially we are forming an ugly upward triangle of sorts. I could care less about the chart pattern, the reason I mention it is to illustrate how price has come near to the point where the compression will have to break to one side or the other. What makes this more interesting is the Pound is doing the same thing but only in the opposite direction.
Today I think keeping directional bias open is still the best decision until this breaks to one side or the other. If it does break to the downside that would present us with a clear start to a downward cycle and thus potentially give us directional bias for the remainder of the week to the downside. I have selected large manipulation points from which to trade from today so patience is going to be a virtue as we wait for the market to come into the pre-selected manipulation points. As always any stop run of a pre-selected manipulation point will be a valid trade setup.
Will The GBP/USD Break Lower
As I previously mentioned the Pound is compression against a major floor and starting to break it. So many times traders get caught up in the belief that a forex chart pattern has to break in a specific direction. For example they look at a downward triangle and they say it has to break down. The bottom line is these chart patterns do give valuable information but its not on the next direction of the market. Chart patterns show the compression of the price. In other words, the range of the market gets closer and closer. When that occurs and comes to a peak the market often accelerates in the next direction but that direction is not definitely determined by the chart pattern. I prefer to wait for the break of the pattern and then the stop run of the backside of the breakout point.
On the Pound today I will keep directional bias open as well. For those of you who are members make sure to watch tonight’s video preview as the analysis on the Pound is a bit more complex and I break it down with the charts in the video. As with the Euro, any valid stop run of the pre-selected manipulation points will be a valid trade setup.
Forex News For September 30th 2015
UK Final GDP 4:30 AM Eastern: Final GDP is expected at .7% this month. Because this is the final number it is much less likely to deviate as compared to the first and second GDP number. This is more than capable of creating a 15+ pip spike easily
US ADP Non-Farm 8:30 AM Eastern: Over the last 6 months ADP has become a much more significant economic indicator as compared its history. This month 185K is the expected number and a 15K deviation +/- from the expected number will create a 15+ pip spike and has the possibility of changing short term trend with a big enough deviation.
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