USD Strength Slowing As Pairs Come Into Key Levels April 13, 2015
USD Strength Holding For Now, Hefty Levels To Test Below
While the USD strength is remaining it is definitely slowing down with the EUR/USD and GBP/USD coming into monthly lows for the test. The EU is within 100 pips while the GU has already hit and showing some bottoming. Having said that I really didnt expect an extended push last Friday as they at least took some profit from the moves down. This in turn does show that the strength remains even if the probability for a turn at these lows is still good. In short they will need some conviction to break them and is unlikely on the first test. The GU is a good example having hit its March lows and showing some weak bottoming last Friday. The EU still has a ways to go so we may see them push the EUR/GBP to get the EU to catch up.
EUR/USD Gaps Down To Start Week
Since the gap on the EUR/USD this morning has already closed and traded higher the open price today should be a bit harder to break if they are going to push lower to test the March lows. I dont see any clear bottoming but with the extended pushes without at least a false push up this pair can turn at any time. This will most likely depend on what they think the ECB will be doing later this week.
I will be more open on direction today and while the safer level to short will be at 1.0683 I will be open to short at the 1.0635 while watching for any conviction showing they will likely test above. I will only be looking for the long from the lows around 1.0579 but would prefer a stop run to Fridays lows to get a better entry.
GBP/USD Gets Mild Rejection Of March Lows
Although the GBP/USD has tested its March lows with some mild rejection the bottoming seems weak since it couldn’t reach up to test 1.4648 on Friday. Now that the USD strength is kicking in again we will see if London has the conviction to push and hold below the gap open to give me a clear bias for the next push down. If so I will be open for the short from the Asian highs but if they do pull it back I will wait for 1.4657. Otherwise I will be open for a long from the 1.4600 area but would be best with a clear stop run to the lows.
EUR/JPY Also Testing March Lows
The EUR/JPY also made a run close to its March lows last Friday but when it made the extended push the support that kicked in wasnt enough to amount to much of a pullback showing the buying just wasnt there. Like I said above the probability of a break on the first test isnt good but its looking like they just might have enough conviction to push lower if they cant find any buyers to help a push upward. I wont have a clear bias today but will be willing to take a riskier short from 127.70 or even a backside off 127.24 if they thrust past the March lows. Otherwise I am open for the long at 127.24 but will need a clear set up and preferably a stop run.
Forex News Today
The calendar is devoid of any significant news so getting any data to get them pushing aside of a tape bomb they wont likely have the conviction to break these monthly lows. Having said that if the USD strength does hold up then they will prove that idea to be wrong.
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