EUR/USD, GBP/USD June 6, 2013 Analysis
Not much has changed from yesterday with the EUR/USD other than it has become even less clear on direction. With NFP coming up Friday there is a good chance that we will see similar price action today. having said that there is the rate decision from the ECB along with the press conference so its pretty safe to say we wont be getting much for movement until then. Again I will be watching for signs on direction using the hourly closes but I highly doubt I will be holding a trade into that news if I am not at break even at the time.
As you can see with yesterdays price action the hourly close below the Asian lows did not show direction which is why I always impress on members that we need to be more concerned about the levels that have higher significance rather that any horizontal support or resistance. Therefore today it will be the same with just a couple small adjustments to the levels to be watched. The 1.3100 psych level is a big one with so many daily highs clustered around it. An hourly close with some conviction above it will be significant but I would expect the resistance to kick in again and most likely get the deeper pullback for the entry long. I will consider a short but a good hourly close is far from price action right now so I will be looking for the stop run above yesterdays highs to consider it.
The GBP/USD has made the third push up looking ripe for the reversal. However the news could change all that when the BOE announces later today also. My bias will be for the short and will prefer a stop run to the highs to enter. As with the Euro if I am in a trade when the news comes out I will want to have the stop to break even if I am going to hold it though the news. The fact is the data from the UK has been slightly better than expected lately so the chance of them increasing the Asset Purchases is low. Giving the chance of the move north a little more probability than I like so I will be cautious and want a good entry.
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Forex News Today
As I mentioned above the calendar is busy today. Starting with some bond auctions from France and Spain. These are marked as low and medium impact but will have a higher impact if spreads rise significantly or they get a lower selling volume than they want. The chance is low with the ECB trash for cash program but it is something to be watched. There is also German Factory orders expected to drop so it seems more likely to surprise up but will need a big one to create a big move with the interest rate decisions soon after.
Of course the BOE will be watched for Asset Purchase increases while the ECB a rate cut and what is said in the press conference. Anything could happen here.
The US has Thursday Unemployment figures but being released at the same time as Draghi starts to speak it will be ignored barring a large miss.
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