EUR/USD, GBP/USD, Gold Daily Analysis June 25, 2014
With the EUR/USD still stuck in the range of the push down Friday the best entries will be at the high or low of yesterdays range. The daily 1.3612 level is still valid but weaker with the conviction above during the London session yesterday. The best level for the short is up at 1.3626 but if they can push price down during the Asian session I will look at the test of 1.3612 for a clear set up to take the short there. Otherwise The entry that has the most confluence is the long from around yesterdays lows with the hourly 200 hanging right above. The 1.3583 daily level has been holding for three days now and with no conviction to make the second push down the higher probability is to at least test the recent highs where the four hour 200 has a good chance to hold it in this range yet again.
The GBP/USD took a dive as both Carney and the other MPC member Bean more or less dashed hopes of a sooner rather than later rate hike in the UK. Even though Carney did try and back peddle a little bit saying the previous speech saying rates would rise sooner than many think, however it don’t look like may took the bait. Today I will have a bias for the short but since this is just a first push I will be open for the potential fake out to the downside even though there isn’t much backing it.
The best level to be taking the short from is at the psych level of 1.7000. The 1.6992 is valid as well but I will prefer to see them push down during the Asian session a bit further to test yesterdays lows before a test there for a short. If they do run it off and show conviction below yesterdays lows early in the London session I will look for a backside of the level trade like I took last week during the London live training session. If that happens the levels are tight together with the hourly 200, the 80 level the GBP likes so much as well as yesterdays lows, are all valid so getting the short from such close levels will need a clean set up and good entry. I will be open for the long from yesterdays lows but will need to see them hold during Asia and prefer the test of the Asian highs during the London session before running stops to the lows.
With gold making a move early during the Asian session I am more apt to think its a fake out but will be watching during London to see if the lower level holds for a long. If it does break to the downside showing conviction it will solidify that yesterdays break above the highs was the true fake out and I will look to potentially trade the continuation. Otherwise I will be looking for the set up long close to where price is now after a pullback to the upside.
Forex News Today
The calendar is quiet during the London session today. There is the Gfk German Consumer Climate coming out at the start of the Frankfurt. The EU could get choppy or even see a stop run early on if this misses big.
The US session has Durable goods data that should be better than expected considering the better housing data recently. It will mostly depend on if the rich supporting the market are actually buying appliances to put in them rather than just buying as a place to store their money and let them sit. My thoughts are the latter so the potential for an as expected or lower release is good as well. Either way I doubt it will have much impact with GDP data released at the same time. Expectations are for a drop further below zero to -1.7 showing the US is closer to technical recession and that may get the big boys thinking the Fed will print more and the USD will weaken. Otherwise it will need a big miss to the upside to get much USD strength.
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