March 25, 2013 EUR/USD, GBP/USD Analysis
At the eleventh hour just before the ECB was due to cut off liquidity funds to Cyprus banks. We have a deal! Well isnt that just peachy? However the details are still a little bit unclear. Well quite a bit unclear. What does seem to be the case is they aren’t going to hit the small depositors but as Reuters reported this morning “Deposits above 100,000 euros, which under EU law are not insured, will be frozen and will be used to resolve debts. It remains unclear how large the write down on those funds will be.” Current estimates are running in the 20% range but that may actually go up depending on how big of a bank run happened before they could set up the capital controls over the weekend and whether or not they could actually implement them before many Russians and British alike have been able to transfer funds while the banks were closed. Yes you wouldn’t think that could happen while these banks were closed for that reason (capital flight) but as the saying goes “money talks and BS walks”
I don’t think I could ever say it enough. Nothing surprises me these days. Disgust me yes but surprise? Not a chance.
Today we are looking at a probable test of the 1.3100 level. Although I didn’t want to count the push up from the lows last week due to it still remaining in the range its much more clear now that they have started at least a first push out of the range or counting the one from the lows we have two and working on the third. What is a little concerning is the large move on the news mentioned above and it has already tested the daily 200 EMA and is not far from the 4 hour 200 so there is a chance this is as far as they go before a reversal. What I will be looking for today is this top forming a topping formation with a stop run to these highs we have for a short or the test of this breakout above Fridays highs holding as support during the London session proving it as support for the long.
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The GBP/USD did as expected in Fridays commentary and gave another push to the upside. However it also missed my entry manipulation level by over 10 pips. Its is finding some resistance at the 4 hour 200 EMA right now but since the push Friday was short I expect it to finish out today. Right now its being held back by the EUR/GBP rising significantly on the Cyprus news so once the EG finds its resistance then the GBP/USD will probably rise to finish this push and possibly be extended on the level pip count. The level i will be looking for a long at will be the 1.5220 where it found support Friday. Its also the 20 level which gives it some more confluence also. The next daily level it has potential to test is 1.5320 so if it reaches there it will be one long push or show the reason why I dont like to count news pushes and show a cleaner 3 pushes up. Then most likely ready to give a reversal trade.
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Forex News Today
There isn’t any scheduled releases of note today so they will be digesting the news from Cyprus and the details of the deal as they trickle out. Depending on what they are it could mean positive movement on the pairs or negative so be careful out there today. There is a helicopter Ben speech late in the trading day so that may have some impact but is after our trade entry time so just be aware of that if you are in a trade.
Below is an interesting interview with Reggie Middleton by Max Keiser I wanted to share. Reggies opinions are of the few I really respect with his no fluff and spin so I thought you may enjoy this also. You can ship the first 15 minutes or so of Max and his figuratively vomiting which is a little over the top but if you like Max and his theatrics then go ahead and watch it. 🙂
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