FX Daily EUR/USD, GBP/USD Commentary September 25, 2012
Today on the EUR/USD I see we have had the expected push to the downside. Things didnt go exactly as planned as we did have the break below the Friday lows support level during the Asian session. However the test from below that I mentioned in the September 24th forex commentary went off like a charm during the London session and an aggressive entry short had a gain of 50 -60 pips.
At this point we are still in a third push situation and a longer term perspective shows we should be looking for the reversal. The bottoming formation is there but we have already had a 50 pip pullback so its still up in the air on a bias for direction today. I do have a sneaking suspicion that we will see the test of the hourly 200ema from the bottom again today and a possible break since the conviction for pressing the short side seems to not really be there. Today I will need to see some clear manipulation and trap to be confident in the direction of my trade. The levels I will be looking at is the lows from Monday for a long and the hourly 200ema that coincides with Fridays lows for the short. Anywhere in between is much more risky to trade today unless we see some very clear trapping going on.
The GBP/USD had similar price action yesterday but had the deeper pullback during the London session as the Euro being the weaker currency can be seen on the EUR/GBP. With more evidence of the push up last Friday being a false push I do have a slight downward bias here but that wont make me exclude the possibility for a long today. The support at the hourly 200ema held nicely and a nicer looking bottoming formation has formed. Having said that the safer trade for a long position will be around the lows yesterday or at the hourly 200ema again. With the thrust to the upside seen during the last hours of the New York session it would seem that there could be some strength coming in but I dont see it as USD weakness with out the EUR/USD following suit. More so the weakness of the Euro while some USD weakness was there too accompanied with what I figure was the plunge protection team coming in and arresting any fall in the S&P for the day.
Today I will be looking at the test of the lows fro Friday again for the possible short and as mentioned earlier the long from the 200ema.
Forex News Today
High impact news is light today but there is a couple medium impact events worth mentioning. Starting with the GfK German Consumer Climate. With the IFO data yesterday being disappointing we have a good chance for the same here and depending how bad it is will be Euro negative. As always a good chance for the manipulation too so beware. The rest are all mainly Central Bank personnel speeches starting with the BOE Fisher. Then we have the SNB Chairman Jordan. This one could be big if he says anything about the EUR/CHF floor but I havent seen any rumors so I have my doubts. Topping them off we have Draghi speaking later in the day and we all know hes going to do a Euro pump so that should be interesting.
We do have CB Consumer Confidence from the US during the US session expected to rise significantly. I dont understand how that could be expected but it is 🙂 Lastly we have Tim Geithner speaking but his speeches largely go unnoticed being the yes man he is.
Today I leave you with another video from CNBC with Gary Kaminsky telling it like it is with Bernanke’s “all in” bond buying program and describes it well as a Kamikaze effort that “we all know will end badly”. It seems CNBC may actually be removing head from butt. However I have my doubts 🙂
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