EUR/USD, GBP/USD November 20, 2013 Analysis
The price action on the EUR/USD yesterday looks as though they were waiting for Ben to jump in and say the Fed will be printing until there are no more trees. That’s not really what he said about an hour ago but it was close. Here are a few quotes.
- BERNANKE SAYS: MAIN RATE MAY BE LOW WHEN JOBLESS RATE BELOW 6.5%
- BERNANKE SAYS: MAIN RATE LIKELY LOW FOR LONG TIME AFTER QE TAPER
- BERNANKE SAYS: ECONOMY `FAR’ FROM WHERE FED WANTS IT TO BE
- BERNANKE: ‘MAY BE SOME TIME’ BEFORE POLICY AT ‘NORMAL SETTINGS’
- BERNANKE SAYS: FOMC COMMITTED TO ‘HIGHLY ACCOMMODATIVE POLICIES’
- BERNANKE SAYS: FOMC TO CONSIDER PROSPECT FOR LABOR MARKET GAINS
Whats interesting is they waited to finish out the second push until he spoke when I am rather sure they knew what he would say. The clues come in the appointment of Janet Yellen to take his place. The last thing they want to do is give anybody thoughts of the taper again when every one knows that will never happen while Janet is at the helm of the Fed. The Max Keiser interview below with Jim Rickards goes into more detail as to why this is the case. What is also rather interesting about this episode is that hyperinflation has already started. Yes its the art market that don’t effect most of us but it has to start somewhere. It only makes sense that the ultra rich who have benefitted the most from the print fest will be where it begins. On to the charts.
Since we have the finishing of this push during the Asian session I am a little skeptical but the hourly conviction showing up like that can not be ignored. I will only be looking for the long today expecting the third push but will be cautious because they will most likely try and push some of these longs out of the market first. The best level for the long is at 1.3540 at yesterdays highs but if they really want to push them all out they will push down and do a stop run to 1.3525 and use the four hour 200 ema traders to their advantage. Having said that if they see too many orders built up at that support level they wont let it get there.
The GBP/USD stayed within the range yesterday laving us with no clear direction so the safer trades will be from the highs or lows of the range. Having said that if the Euro makes the third push it will likely drag this up with it making a first push out of this chop. The daily chart also shows the potential for the break but it wouldn’t be the fist time they have faked out the daily chart traders so I will keep an open mind. I will also say the daily lows at 1.6080 are still valid since the hourly close below already tested the next level and there wasn’t the daily close below but the aggressive nature of taking a trade there will require a good entry and I would prefer the lows.
Forex News Today
The only big news event during the London session today is the MPC Meeting Minutes. If there was any thing mentioned about increasing asset purchases the GBP will weaken. I have my doubts that will happen since the news coming from the UK hasn’t been too disappointing but it is surely possible.
The US has Retail Sales data later in the day with expectations expected rather flat right around the zero mark. There is really no reason to think it will be better than expected so the probability of the miss to the downside is better. It will most likely be close but I will be watching if I am in a trade. An hour and a half later is the US has Existing Home Sales and more Fed speak but as long as there is not a big miss on the data and Dudley drops something unexpected they are likely to wait for the Fed Meeting Minutes later in the US afternoon. If you are in a trade its best to close if you haven’t got the stop to break even yet or at least minimize risk.
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Max Keiser episode
Im sure you will find this interesting even if Max don’t really lose his rag too bad here 🙂
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