EUR/USD, GBP/USD January 29, 2013 Analysis
First off today I need to correct an error I made in yesterdays commentary. Thanks to the diligent member who pointed this out to me. The mistake was I referred to Daniel Hannan as an MP in the UK. He is not. He is a member of the European Parliament, representing South East England for the Conservative Party. My bad.
The EUR/USD never made the third push I was expecting yesterday so I will be looking for that today with not quite as strong of bias as yesterday. I did take the long from 1.3338 and added a position at 1.3329 when the market went against me. Once it moved 30 pips in my favor on the second position i moved my stops to break even at 1.3329 leaving it some room to come back if they hadn’t got the orders stacked enough. Sure enough it did and the darn thing tagged me by one pip just before it ran 40+ pips in my direction. -10 pips on one position for yesterday. As I was talking to a member on Skype I explained that I followed my plan and I am happy with that. On to the next trade.
The levels I will be looking for the long today will be the daily low yesterday of 1.3424. there is a chance we could see the manipulation at either of the hourly levels just above that price so i will be watching those also but a clear stop run below 1.3424 would be my preferred entry level. If we do get the famous hourly close below yesterdays lows during the London session today I will consider a short with some clear trapping candle patterns to the upside but they will have to be rather pretty. Having said that there is still the daunting daily level above at 1.3486 that has potential for a stop run to go short from also. However the bias is still for the long and will only change to neutral if we get this same chop through the London session today.
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Have I ever said how much I hate it when the EUR/USD and GBP/USD are moving in opposite directions?
The GBP/USD made the second push as expected in yesterdays commentary but never gave up an entry. There were some nice sets of legs after the break out on the pullback but the entry was too aggressive for me. It wouldn’t have mattered anyway because my trade plan consists of moving the stop to break even after the trade gets well over 1-1 my risk and they would have tagged me break even during the NY session just before the drop. They have been doing that a bit lately.
My bias is for the third long term push down today. However in order to see that the Euro will need to hold and chop again or turn while the EUR/GBP holds or rises. In turn we will see the same sort of price action as yesterday. This is doubtful as they almost never do the same thing twice but nothing surprises me these days. Since this pair has some distance to the next significant daily support level it does have a chance.
There are a couple of hourly break out levels we could see the manipulation today but the most significant is the daily low from Friday last week at 1.5744. With an hourly level just below there that would be the optimal area to see the manipulation. Having said that I will also be watching the lower break out levels at 1.5714 and 1.5704. If the Asian session cant break it up and make some effort to reach 1.5746 then I will be watching for it during the London session to see if they wont let price go up with the manipulation patterns we look for.
Forex News Today
The economic calendar is light with no high impact events today. There is GfK German Consumer Climate expected to improve slightly but baring a big surprise I dont expect much from that.
We have nothing from the UK and only medium to low impact releases from the US. Nothing of note.
This Just In 🙂
France’s labour minister sent the country into a state of shock on Monday after he described the nation as “totally bankrupt”.
Michel Sapin made the gaffe in a radio interview, which left French President Francois Hollande battling to undo the potential reputational damage.
“There is a state but it is a totally bankrupt state,” Mr Sapin said. “That is why we had to put a deficit reduction plan in place, and nothing should make us turn away from that objective.”
And then the back peddling in the end.
He added: “France is a really solvent country. France is a really credible country, France is a country that is starting to recover.”
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