Daily FX Analysis: Playing Corrections and Trading Trends from Value

Trading today was a little mixed.

Poor Euro area GDP figures this morning resulted in a push lower in the Euro and in most risk on style currency pairs.

The Pound suffered at the hands of King and comments that negative interest rates could be employed in the future but that was only after the revised upward growth targets; the two don't really align and markets felt the same as they chopped around trying to really decipher the message; reality being though that the UK now has the third largest national debt per capita and looks in a shaky position; hence why fundamentally we like further Pound weakness.

This made trading relatively interesting, we have had some sharp moves lower recently and pushes higher in the USD and we had some short term correctional plays again today which, if played well, offer some nice intraday trades and a fair few pips.

EUR/USD
As mentioned, poor GDP really weighed on the Euro today pair tracking consistently lower.

We remain short targeting the March/April lows around 1.2780 but expect another pull back to offer more value for short entries; with many pairs showing the same signs of potential pull backs we could see a more broad reversal in US Dollar in the near short term or some increased sideways chop until some of the orders are cleared.

There are some nice plays on the 4hr charts offering good value and a push higher could offer additional shorts, keep an eye on the stochastic cross overs.

Daily charts we have now seen a push below the Ichi Cloud and a cross lower in Ichi lines, both good indicators of a larger move lower, RSI has room lower but is within the oversold region so could also point to a slight pull back to value.


GBP/USD
Pound chopped a lot today as it tried to find its feet. We suspect we could see more sideways movement but like the idea of looking for shorts around current close levels back up to the 1.5350 level. The Pound does have a habit of chopping sideways before making follow-up moves so may require a bit of patience.



EUR/GBP
After briefly popping out of our range the EUR/GBP retraced today back into the range and some good value but the 4hr chart and order books are giving us some clues to potential long options.

Our current play with levels is highlighted below; stochastic cross nice Pin Bar and order book in our favour for long entries.


USD/CAD
Spoke about playing correctional moves and the USD/CAD offered a good example.

Typical 4hr chart with overbought Stochastics putting in a nice cross; this is coupled with a price rejection outside of a value area and offered really good intraday shorts; these are lovely plays and offer a few good pips relatively easily with a pretty higher win rate (6o% to 70%).