September 9th 2013 EUR/USD, GBP/USD Analysis
Now that we have the majority of the big news out of the way for this month we should have a little more normal price action regarding direction on the EUR/USD. Not that there has been anything close to normal markets for quite some time but with that in the rear view mirror at least the algo bots wont be going nuts on us or at least have less chance as long as the US don’t do something stupid like attack Syria in the coming days.
Looking at price action alone it looks as though we have the first intraday push up on the Euro today. However since it could only retrace the Draghi drop Thursday by around 60% I am keeping an open mind on direction. There are a couple other reasons for this too. One being that a bad NFP print didn’t really seem to get the big boys thinking Bernanke wont taper at the next meeting since we don’t see more conviction on USD weakness. Lastly is price has just gone back into the range it was holding last week and couldn’t even break and close above the lower end of that range. In short its better to play it safe rather than have a bias today.
The best level to short from is the 1.3182 but with the Friday highs just above at 1.3188 the set up will need to be nice since they may want stops above there before they move off. Otherwise the long can be considered at 1.3155 but will be aggressive without an attempt at the highs during Asia this morning. It can also run as deep as 1.3138 before they decide to run it up today.
The GBP/USD is in a similar position with a very nice topping formation due to NFP last week. Since it was formed on news I will be keeping an open mind here today also. That could easily be a nice stop run, of which they often do on news events but the safer way to look at it is that they have no clear direction and look to see what they do at the key levels. As long as the 1.5646 level can hold during Asia this morning then it will be the first place I look to short from and would be happiest to see them push it down during the end of Asia and use the Frankie fake out to test it for the short. Otherwise getting the hourly close above there will show some conviction during London but I will still be cautious taking a long since the true conviction will be above the 1.5665 level.
Forex News Today
The Forex Calendar is rather light during the London session today with nothing really important to mention. However there is some Chinese CPI data any Asian session traders should be aware of a couple of hours from now. If this can miss substantially to the upside there could be some repercussions in the Aussie crosses so watch out for that.
Later in the US session there is the BOJ Meeting Minutes also so entries around that time should be carefully considered also.
Banging the Close
I found something very interesting watching the Max Kieser episode below this weekend. As usual he is way over the top in his delivery but not only did I discover that since we have been teaching how banks manipulate the markets things have changed due to the rescue of the biggest banks. Its no real surprise that they just got bigger but we used to tell folks that the 10 largest banks control over 70% of the Forex market. Now the data shows that number has changed in that now 4 banks control over 50% by them selves. How crazy is that? That’s not even the most interesting part.
Anybody that has been around long enough knows that since these guys have access to order flow they will use that to their advantage to make money for the bank. I cant say I blame them since there are no legalities to stop them. Not that that would matter anyway but in the video below you will hear how its done and I am going to tell you right here how you can profit from it. Pay close attention during the latter part of the first half with Stacey. When I heard this a light went off in my head so I had to share.
They call it banging the close because they see all the orders on their books and enter a sizable position before they execute these orders so they can profit on the small spike. The way to trade and profit from this is using binary options rather than a spot forex account because its more like scalping of which I am uncomfortable with. However as you will see all this takes place within about an hour so using the binary options is your best way to profit since there is no stop, take profit and you are only trading against time. In short you can make 70+% of your risk in just minutes.
You will need to be watching only the majors at this time and may trade any one or a few of them. When they bang the close you wait. You don’t want to trade the spike since you never know how far it will go. Once it starts slowing and starting to turn as the banks are taking profit use the 1 min, 5 min, 10 min or 15 min expiry and trade against the direction of the first 15-30 minutes of the “banging of the close”.
Having more or less given away a strategy to use how these guys manipulate using their clients orders I can not stress enough that you do NOT just go out and start risking your money doing this. As with any method it takes a good trade plan along with consideration of entries etc. My first suggestion would be to go back over the charts and watch what happens at the close of the NY box. You will see just how often this happens and what signals they will be making the pullback taking profit in the second half of this hour. It don’t happen every day but it is quite often.
If you have any questions about Binary Options education you can contact Allen Henn at firstname.lastname@example.org to set up a time for a conversation over Skype or just send him a contact request to Allen.Henn
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