Hey folks,
Stocks are continuing to confirm the downside with an intraday break of 878 that was only salvaged by a "plunge protection team" surge of buying in the last half hour to force a close above that 878 neckline everyone's watching. As I've been saying, we could get a decent short term bounce, but the probabilities for one isn't very high. I'd recommend holding short, or if you're not in, getting short either on another clear break of 878 or on a bounce up to 900 if we're lucky enough to get one (I'll add there if it happens as well)
The EUR/USD and GBP/USD have looked medium term bearish, but still have yet to take out their June 8th lows, and until they do, I think it's unwise to work position trades or ambitious swing trades looking for more downside. The key level to watch is likely 1.3790 on the EUR/USD for now since we're more likely to exceed those lows on the Euro right now than the Pound. Until then, I'm sticking to scalps and short term trading support and resistance and following momentum when we get a recognizable trend rolling for a session.
Gold and Silver worked notably lower today which was good, but they're extending out a 5 wave that will see some sort of correction upwards sometime soon most likely. The plan is to just stay short here if you're in. If you're looking for entry, I'd wait until that correction develops and starts to top out. I'll let you know.
In news Wednesday, both Halifax HPI and AU Employment data came out too close to expectations to hit our triggers. For Thursday:
0700 UK Interest Rate Statement (expected no change at 0.50%) - Economists are unanimous in expecting no change, and I agree that there's almost no chance we'll see a change in rates here. Obviously any hike is bullish GU and any cut is bearish GU, but the market focus will be more on the statement than the decision itself since that's where the controversy lies. There's enough back and forth about the BoE potentially expanding their Quantitative Easing (QE) measures by an additional £25 billion to their £150 billion maximum.
If they expand their QE by £25 billion, or better yet, hint at getting the government to expand the maximum beyond £150 billion, that will be bearish GBP/USD and cause it to sell off by 50+ pips.
If they refrain from expanding their QE and keep it at £125 billion, that will be bullish GBP/USD and cause it to rally by 50 pips.
Obviously other things that come up in the statement will have an effect, but QE is far and away the most anticipated issue. Because of this, it's likely speculation over an expansion of QE will weigh heavily on the GBP throughout the European session and give some good longs on EUR/GBP and shorts on GBP/USD. If there is a big surge towards GBP weakness during the session, be much more careful and quick to exit if that rumor is confirmed with a mere £25 billion expansion, as profit taking will set in shortly thereafter.
TRADE LIVE WITH SIR PIPS FOR $39.00 FOR 2 WEEKS
Sir Pipsalot has a live trading room, in which he trades these news reports. There, he shares his trades in real time, including exact entries and exits, and detailed explanation for every entry and exit. The service costs $299 per month, but we have a 14-days $39.00 trial. Go to Forex Diamonds and take advantage of this offer. This offer is for NEW customers only.
To our success,
Sir Pipsalot
Stocks are continuing to confirm the downside with an intraday break of 878 that was only salvaged by a "plunge protection team" surge of buying in the last half hour to force a close above that 878 neckline everyone's watching. As I've been saying, we could get a decent short term bounce, but the probabilities for one isn't very high. I'd recommend holding short, or if you're not in, getting short either on another clear break of 878 or on a bounce up to 900 if we're lucky enough to get one (I'll add there if it happens as well)
The EUR/USD and GBP/USD have looked medium term bearish, but still have yet to take out their June 8th lows, and until they do, I think it's unwise to work position trades or ambitious swing trades looking for more downside. The key level to watch is likely 1.3790 on the EUR/USD for now since we're more likely to exceed those lows on the Euro right now than the Pound. Until then, I'm sticking to scalps and short term trading support and resistance and following momentum when we get a recognizable trend rolling for a session.
Gold and Silver worked notably lower today which was good, but they're extending out a 5 wave that will see some sort of correction upwards sometime soon most likely. The plan is to just stay short here if you're in. If you're looking for entry, I'd wait until that correction develops and starts to top out. I'll let you know.
In news Wednesday, both Halifax HPI and AU Employment data came out too close to expectations to hit our triggers. For Thursday:
0700 UK Interest Rate Statement (expected no change at 0.50%) - Economists are unanimous in expecting no change, and I agree that there's almost no chance we'll see a change in rates here. Obviously any hike is bullish GU and any cut is bearish GU, but the market focus will be more on the statement than the decision itself since that's where the controversy lies. There's enough back and forth about the BoE potentially expanding their Quantitative Easing (QE) measures by an additional £25 billion to their £150 billion maximum.
If they expand their QE by £25 billion, or better yet, hint at getting the government to expand the maximum beyond £150 billion, that will be bearish GBP/USD and cause it to sell off by 50+ pips.
If they refrain from expanding their QE and keep it at £125 billion, that will be bullish GBP/USD and cause it to rally by 50 pips.
Obviously other things that come up in the statement will have an effect, but QE is far and away the most anticipated issue. Because of this, it's likely speculation over an expansion of QE will weigh heavily on the GBP throughout the European session and give some good longs on EUR/GBP and shorts on GBP/USD. If there is a big surge towards GBP weakness during the session, be much more careful and quick to exit if that rumor is confirmed with a mere £25 billion expansion, as profit taking will set in shortly thereafter.
TRADE LIVE WITH SIR PIPS FOR $39.00 FOR 2 WEEKS
Sir Pipsalot has a live trading room, in which he trades these news reports. There, he shares his trades in real time, including exact entries and exits, and detailed explanation for every entry and exit. The service costs $299 per month, but we have a 14-days $39.00 trial. Go to Forex Diamonds and take advantage of this offer. This offer is for NEW customers only.
To our success,
Sir Pipsalot
