EUR/USD, GBP/USD, Gold Analysis June 11, 2014
The EUR/USD did get the second push down yesterday so I will be only looking for the short on this pair today. The question now is where will they push it off from. The best level I see right now is the 1.3553 highs of the London New York overlap but if we do see the conviction hold below yesterdays lows then that becomes a backside opportunity for the short as well. I am a little concerned that the NY session yesterday didn’t at least make an attempt to push down into the lows around 1.3500 but they also didn’t have any desire to try and push some of the weak holders out of shorts with a pullback.
At this point it sure looks as though we will see some conviction below the lows during the Asian session potentially being a fake out but that will depend on just how far they move it below and how the big boys treat it during the London session today. If they do hold the break closer to the 1.3534 level then the probability of London running to the Asian highs or 1.3553 is good. However if they do drop it down closer to the lows and price leaves the Asian box down there the backside entry at 1.3534 is most likely where they will stop it. There is the small chance they want to close the inefficiency below the break out yesterday but as I mentioned earlier if there was that much desire to push out the weak holders and grab orders there they would have done it during the NY session yesterday.
The GBP/USD managed to get its first push down yesterday with the USD strength holding. It did have a whip about due to the news releases but ended up making the push to give us a bias today. Although I will be bias for the short I will also be open for the long since it is just a first push and the EUR/GBP looks to be expecting its third long term push down potentially having a daily close below the yearly low.
Otherwise we should see this pair run for the second push but has a higher chance to pullback a little higher as the EG falls until they are happy to push the GU. The best level right now is 1.6769 but they could push as high as 1.6780 where here is the most confluence for a turn. If they do show the conviction below the lows during London then the Asian highs or 1.6758 look best depending on the drop. If its far then the backside at the Asian lows but more likely yesterdays lows will be where they run before a turn. I will only be open for a long if the lows hold and they show they just wont let it break down during the London session.
Gold made the push up yesterday as well holding with the correlation of USD strength and I expect this to continue. The probability that they push it or rather let it rise to 1278.71 is much higher now before they attempt another smack down to try and make it seem as though all is well since gold isn’t doing as many expect regarding the economic situations around the world compared to gold prices. In this regard the people who are looking for the scare to take hold are watching gold to see if the central banks lose control of price suppression and I have to agree the jig will be up at that point. Having said that my thoughts are that the big boys have not just a large incentive to hold gold down but also the will and means to do it so we will most likely see at least one more smack down. However there is the potential they are at the end of their rope. If I am in a long on gold I will hold a small position on the chance that is correct but also be prepared for the smack down as well.
The best level for the long today is 1258.93 but if they keep up with conviction to the upside it will most likely run off without me unless I can manage a backside entry at yesterdays highs or just below.
Forex News Today
The calendar starts off with UK Unemployment data with the Claimant Count expected flat while the Unemployment Rate drops a tenth of a percent. I don’t see a good chance of both of these coming out as expected. How does the Rate drop while the number of unemployed remain the same? Yes is easy for the US since they fudge how they count but the UK is different so one of these will have to give. My best guess is that the Claimant count will be better than expected since the UK at least looks good on paper these days. Later in the day a MPC member speaks but I highly doubt he will surprise with a tape bomb. That’s Carneys job.
The US does have a 10yr note auction and the Federal Budget Balance but I have my doubts these will have much impact either. Barring a large surprise these have been non events lately.
Asian session traders need to watch out for the Interest Rate and Statement from the RNBZ and later a RNBZ member speech. This will only effect the NZD and potentially AUD but if they surprise it could be big. Later the Aussies have Unemployment data as well so keeping an eye on that release would be wise as well.
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