EUR/USD, GBP/USD Daily Forex Commentary October 5, 2012
Today we have a third push up on the EUR/USD after the chop yesterday so we will be looking to see the topping formation then a manipulation move to the highs for the trap and the short. having said that we do have the Non Farm Payroll news release today so price action may be a bit subdued during both the Asian and London session.
As for the areas I will be looking for the short will be yesterday’s highs of 1.3029 or a trap move after a clear topping formation has made a run at the highs and failed. Otherwise if by some chance we do get the push down that I miss there may still be an opportunity for the long trade once price comes back and tests the break out level of 1.2967. I do have a short bias today but when I look at the daily charts its in an area that has no real resistance other than daily highs or lows. the most significant level is the recent highs of 1.3177. If Non Farm Payrolls disappoints enough then it will be so USD negative as thoughts of Bernanke increasing the MBS purchases goes up as well. With the Fed having employment as part of their mandate they have an excuse to print as long as Unemployment is high. If you didn’t see the video explaining that in yesterdays forex commentary check out the link.
The GBP/USD is a different story with a clear push to the upside yesterday. The hourly close above the chop on Monday and Tuesday shows conviction but I wouldnt be surprised if there is a deeper pullback if the Euro is going to have the reversal. The first place I will be looking for the long will be the hourly 200ema but the highs from Wednesday could also be tested with a stop run below the 200. Even though the probability is for the continuation with a good clean set up a short is also possible today. If we do get a drop during Asia here and the manipulation is a push up we may get a trap move to the highs and if so its tradeable. However if I am in a trade and see the hourly close above yesterdays highs I will close with the smallest loss possible.
Forex News Today
The only decent news we have other than Non Farm Payrolls from the Us is German Factory Orders. I expect that the German news will be pretty much ignored. The US as always also has its Unemployment Rate and that’s expected to rise so even with a bad print from the Germans I doubt it will have much effect because Bernanke is the Printer In Chief and that will most likely take precedence.
Today I leave you with a mildly entertaining video from CNBC that has Marc Faber and Jim Rodgers in the same interview. What made me chuckle a bit was about half way through the anchor woman asks them both what they thing of the choices the US has for next President. I won ruin it for you so enjoy.
Have a great weekend
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