Forex Market Daily EUR/USD, GBP/USD Commentary October 3, 2012
Today on the EUR/USD we are looking at a second push to the upside. Not only is it a 87 pip push but has the hourly close above Mondays highs. I have to say I am a bit concerned that it didnt get above Fridays highs though. I would be much happier if that were the case and more convinced of a 2nd push trade today expecting the third push. Right now its dancing around the hourly 200ema and if we do get the break below that we will most likely see the lows from yesterday around the 1.2880 level. This is where I would be most happy to take a long position but if by chance we do hold the 200ema during Asia and push away to the upside then thats the first place I will look to see the manipulation.
My thoughts are that in order to see the break of the highs from last Friday it would take something to the effect of Spain asking for the bailout. Well that is off the table at this point with Rajoy stating yesterday that he will not be asking for the bailout this weekend. Then a senior EU official saying that they were not aware of any such comments of the request for any bailout from Spain so that wont be what drives the break. Having said that and the probability for the third push today. The way I see it is the pullback close to or at yesterdays lows and then the third push up to attempt a break of the highs but probably will get held up again. Barring any other tape bombs of course. 🙂
The GBP/USD is in a much different position today. This chop we have seen for 2 days leads me to believe the safest trade for this pair is treating it as a third push chop scenario and trade the range. Right now we are seeing it test the support at the Asian lows from yesterday and if we see an hourly close below that level it will be bearish but there is also the next level of support just below. This is where the safest long position can be taken on a 1 hour stop run or some clear manipulation candle patterns. What does give a little more confidence to the long here is that the EUR/GBP has completed a 3 push move and may be in for the reversal. Having said that as i have pointed out to our members and its obvious to see when you look at the chart. The EUR/GBP has a habit of getting on a run and taking a long time before it will turn so we have to keep this in mind.
Forex News Today
Scheduled releases are light today and with both China and Germany on a bank holiday price movement could be slow. I do have my doubts the London market will be that much effected and we should see some action there.
The only high impact event during the London session is the UK Services PMI. this is a big one and does have a habit of setting up a trap before the release so I will be watching out for that. The expectations are for a drop but it is still well above the 50 expansion level so with a large surprise to the downside we should see the GBP weaken. The chance for a surprise upwards is low with everything still headed south in the Euro Zone. The UKs largest trading partner
The US does have ADP Nonfarm Payroll along with ISM Non-Manufacturing PMI of which both are high impact events but without a good sized deviation we probably wont see much action. However if I am not already in a trade I will surely be waiting until after the release to think about entering.
You Are Kidding Right?
I just had to show you all this. It just cracks me up to see things like this and wonder why the people dont lynch these guys. When times are tough everybody suffers right. NOT. I have to admit its no different in the US or anywhere most likly but there we have it. When will the people stand up and say NO More! Enjoy
Italian “Austerity” In Action: Maserati For Its UK Ambassador
While we already know how Spain’s Prime Minister is celebrating the country’s brand new austerity budget (From Bloomberg: “The premier and five staff drank 10 beers and seven bottles of wine with a dinner of filet steak and turbot on their flight back from a European championship soccer match the day after Spain asked its European partners for a 100 billion-euro bailout to recapitalize its banks, the weekly reported, citing catering bills from the Spanish Air Force.”) there was little color on how the “other” country undergoing austerity (not really) for the common man was enacting belt-tightening and spending reductions. We say “not really” because as we have shown, Europe has yet to actually implement austerity. And yet the people suffer. Or rather, once again, it is the common man who suffers, and because of that is convinced that the government is spending less. It certainly isn’t as we showed in the case of Spain whose tax revenues have increased even as spending has increased, promises to the contrary notwithstanding. But where is the money going then? Surely if the common man is suffering, everyone else must be too. Turns out the answer is no. As the following picture below shows, where previously a simple Lancia with the license plate “ITA1” once stood, the car that is now proudly parked in the same spot and drives around Italy’s ambassador to the UK, Alain Giorgio Maria Economides (read his heartfelt message to all here), is a new Maserati Quattroporte.
This guy should be riding around in a Volkswagon the way I see it. 🙂
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