Daily FX Analysis: Playing Corrections and Trading Trends from Value
Littlefish FX | May 15, 2013 05:22PM ET
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.
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