EUR/USD, GBP/USD Daily Analysis April 7th 2014
The EUR/USD didn’t quite make the third push I expected Friday but did make an attempt having some conviction below Thursdays lows with the daily close holding just above there. The NFP release that had potential to give them reason to run it down disappointed but not really enough to make me think its bad enough to keep the Fed from keeping the taper going. Plus we all know that the up tic on the Unemployment Rate really means anything since true Unemployment is actually much higher than that.
With all things considered I will be open on direction for this pair today. The fact that it did show some conviction along with testing a significant daily level at 1.3682, a potential bottoming formation it could go either way today. We will have more information when the London session opens and how they push it from there. The best level to short is 1.3721 but with its close proximity to current price they may test Fridays highs just above before a push down. The same scenario goes for a potential long at 1.3682 with Fridays lows just below.
The GBP/USD had similar movement Friday with the exception of having a small daily close below Thursdays lows. However with it showing a potential bottoming formation I have to consider that they may stop it here. Having said that we have seen this sort of movement several times before in that we get the three pushes over five days this movement suggests also. Therefore I will prefer the short on this pair today while open for a long with either a stop run to the lows or see them run it up during the Asian session to test the highs, hit the breakout traders then show they wont let it pass the 1.6567 level.
The best level to see the manipulation for a short is at the 1.6596 level where the four hour 200 EMA sits along with the psych 1.6600 just above. There is a small chance they run it to the hourly 200 but with the four hour holding so well on Friday I have my doubts.
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The calendar is pretty light today with nothing high impact to give them much to use for manipulation so we should see the levels tested in a slower fashion. Barring any tape bombs of course. There is a Fed member speech late in the day but I doubt Bullard will surprise.
For the Asian session traders the BOJ has their rate decision tomorrow morning but the press conference will be the one to watch out for. It seems as though they are out of ammo but we never know if they have something else up their sleeve.
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