EUR/USD, GBP/USD Daily Commentary February 8, 2013
There is nothing like one of the boneheads in charge coming out with one small phrase to blow up a perfectly good trade. I have to admit I expected a few tape bombs yesterday but what Mark Carney did was just about nuts. Saying that the UK “must exit unconventional policy” and the GBP went through the roof across the board. I will also say its probably the right idea and being one of the few central bankers that refused to join the print fest as the Bank of Canada governor, stepping into the Bank of England is going to be quite a bit different. The main difference is the UK dont have oil sands to support its economy while its neighbor to the south prints enough USD to support the entire western hemisphere. That is just not the case with the UK and I am getting the feeling he is going to have to learn that the hard way. To be honest I hope he can pull it off because the print fest should have never started while they let the big banks go down in flames. Somehow I have my doubts though.
Our London session trade was a beautiful 1 hour stop run with an awesome entry at 1.5685 however as I watched the market hit my entry it also hit the stop within seconds thanks to good old Mark. I kind of felt like I was back in the beginning of my trading career and tried scalping. However it was me who was getting scalped! 🙂
Then we get Super Mario to the Euro rescue and as I mentioned to one of our members all it would take is for Draghi to voice any concern about the strength of the Euro and it would tank. Sure enough he did and the Euro took a nose dive. What a crazy day but I did have a good laugh anyway.
Today we have a bit of a mess to deal with yet again. At this point I expect somewhat of a pullback on the EUR/USD before the next push down next week. It did close on its lows showing significant weakness but its also at a daily breakout level that is getting defended during Asia this morning. We are already starting to get the trapping candle patterns at the lows so a trap move during the London session to the Asian lows will be enough to get me long for the ride backup to the breakout level of 1.3457. If I dont see the trap at the Asia lows then a stop run to yesterdays lows will suffice also.
If for some reason they do want to continue the move south today an hourly close below yesterdays lows will tell me that and I will be looking for the manipulation to the upside to short from. Most likely that will be at the Asian highs or the highs at the end of the US session yesterday at 1.3406.
The GBP/USD is also still a cluster in its own right with a first push to the upside thanks to our good buddy Mark Carney. My bias is to the upside on this pair today. The levels I will be looking to see the manipulation are the 1.5693 level but preferably the 1.5683 since the break out level of 1.5675 is just below which is another level we could see the manipulation so any entry above that will have to be clear.
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Forex News Today
In short there is no high impact news worth mentioning today. My thoughts are the big boys will still be digesting all the fun we had yesterday.
Have a great weekend
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