EUR/USD, GBP/USD Forex Daily Commentary October 23, 2012
Today the EUR/USD has gone into a third push chop staying in a 65 pip range for the last two trading days so direction is not as clear as we would like it to be. The resistance from Fridays highs holding during the US session does give me a slight bias to the downside but at this point its best to keep an open mind.
If we get a clear 1 hour stop run to those highs around the 1.3080 level I will be taking the short from there. We are already seeing some trapping candle formations on the 15 minute chart just below that level so its looking better. Otherwise the potential for the long trade will be at a clear trapping formation at the lows of the US session Monday at the 1.3040 level or the low just behind that which coincides with the 1 hour 200ema at 1.3024. Personally I will be looking more at the hourly 200 since at that point there is more confluence.
The GBP/USD also stayed in a 60+pip range and found resistance at the 15 minute 200ema. That also coincides with a breakout level from Thursdays lows from last week at the 1.6040 level. This does make me more bias for the short on this pair also. The place I will start looking for the manipulation will be the 15 minute 200ema at 1.6035. there is still the opportunity for the long trade on this pair today. The reason is the bottoming formation I mentioned in the October 22nd forex commentary is still holding with the two tests of the lows from Friday last week that got rejected. If we get a clear 1 hour stop run to those lows the risk will be low and a good opportunity to catch 50 pips or so.
Forex News Today
Scheduled releases are light again today but there are a couple that could be used for some manipulation. They are the UK BBA Mortgage Approvals and later in the US session the Euro Zone has Belgium NBB Business Climate. Neither of these are high impact events but improvement in the UK housing sector would be a GBP positive. The Belgium Business Climate improving would be a nice thought but with the way things are going south all over the Euro Zone I have my doubts.
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