EUR/USD, GBP/USD, Gold Daily Analysis July 3rd 2014
Today is most likely to be slow all day until the big news later during the NY session. Since the US is on holiday for the 4th of July Friday we are getting Non Farm payrolls along with Super Mario today which have a high probability of whipping the market around even before NFP is released. Since Draghi starts his speech at the same time of the NFP release what would be the game changer is if the ECB announces a LTRO along with the interest rate decision earlier. The best course of action would be to just take the day off trading and start the weekend early which is what I will be doing. However for members this will be a great day to catch up and get any questions answered in the live training sessions later today.
The move down on the EUR/USD ran for the first push reversal so I will have the small bias for the next move down. Of which also agrees with my fundamental view of the probable actions of the ECB today. If the ADP Non farm is any clue to todays release we should get a better jobs report although Im not holding my breath. The best level for a short considering where current price is 1.3667 but with the next level less than 10 pips away they could hit Tuesdays lows as well. I would only consider the Asia highs after seeing conviction or something screaming entry without at least a test of the lows during the Asian or London sessions. The long from yesterdays lows has a lot of confluence with both the hourly and four hour 200 EMAs right there. I would also be open for the long with a nice stop run if I wasn’t taking the day off trading.
The GBP/USD didn’t make the push I expected yesterday so once it made the attempt to break the highs on better than expected news and couldn’t show any conviction to make the push it was time to try and maximize my gains and get out before Janet Yellen opened her mouth and potentially throw rain on my parade. Once it tested the Asian lows after the ADP data I waited for the pullback and closed with a 60 pip gain. Not a bad trade and holding through a Yellen speech was just to risky for me.
As for today we could still get the third push but the probability has gone down and considering the data releases it probably wont happen until after. The best level for the long is the 1.7138 but they could dip down as low as 1.7113 before moving off for the news. Otherwise if I were trading today I would be open for the short with a stop run to 1.7175 but only in late London which carries too much risk today which is another reason to take the day off.
Gold has shown a potential fake out to the lows yesterday so if the ECB does go full blown print mode today it should see the break to the upside. If they don’t and disappoint ten gold will see a sell off most likely. Otherwise the levels haven’t changed for potential entries long or short. To be honest I have to say that since I started doing analysis on gold I am disappointed in its movements. Having said that I am not surprised since gold is manipulated unlike any thing else. In the future I will likely change to another forex pair and leave gold alone.
Forex News Today
The calendar could get things moving early with the Services PMI data released during the London session but I have my doubts it will without a very large miss on either the German or UK data. Otherwise they will be waiting for what the ECB does at the rate decision. If they announce an LTRO package they will be looking at the details to see if its potential full blown printing or the back door type they did last time. Of course any announcement will throw the Euro into a tail spin but the follow through will depend on just how they do it. Otherwise the US NFP data could throw a wrench in any sustained move as well. I wont even be watching but will read up on it Friday morning. If you are in a trade and in profit holding through the release, the best advice I can give is, if it spikes your direction once price slows down take the money and run because you could easily be stopped out within the next few minutes.
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