EUR/USD, GBP/USD Daily Commentary April 23, 2013
Again there is not much to talk about concerning the EUR/USD today. We continue to stay in a fairly tight range. Having said that there are a couple price action related things I should mention. Considering the head and shoulders pattern that has formed over the past three trading days my bias will be for the short today. Even though we don’t trade these chart patterns this particular one is typical of a reversal when price has been in what we call a third push chop. The other thing I should mention is that the US ramp up didn’t provide much conviction even though US equities did see a higher move. I will be keeping my options open today though. Since there is nothing clear on direction yet it is best to not be stuck with the short bias and trade the clear manipulation.
The levels I will be looking to short from start at the highs during the end of the US session yesterday at 1.3067 which is rather close to the Asian highs this morning. I would prefer a stop run to this level with yesterdays high not far behind at 1.3083 which will be the next level I look to short from if the manipulation is not clear there. The 4 hour 200 EMA is still holding so the potential for a long there is still valid but the daily level just below at 1.3014 is a better area to be looking for the manipulation.
The GBP/USD is pretty much in the same condition with no clear direction yet. Having said that the move yesterday was much more one sided as the EUR/GBP had somewhat of a bad day. This means the movement was not as much USD weakness related but more of Euro weakness. Pretty much the opposite of what happened on Monday. This tells me the confusion is still what is prevalent and I will be cautious on an entry in this pair today. The only decent level within proximity for the short is the Friday high at 1.5311 but that is right in the middle of the psych 1.5300 and 1.5320 so either of those are possible but the candle patterns will need to be clear and would be best if we see some correlation on the EUR/USD. However considering the price action lately that seems unlikely. The best levels for a potential long are the 4 hour 200 EMA at 1.5262 or the break out level of 1.5242.
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Forex News Today
The calendar today has Manufacturing and Services PMI from France, Italy, Germany and the EZ. Expectations are for most everything to remain flat and considering the way things have been going my thoughts are the chance for a disappointment is higher than a surprise to the upside.
The UK dont have anything worth mentioning and the US only has New Home Sales (I must have misread yesterdays existing home sales) expected to rise slightly but does have the chance to disappoint as did existing home sales yesterday.
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