Forex Commentary:
The euro bounced from a seven-week low against the dollar on Monday, buoyed by sovereign demand following last week’s sell-off as a European Union meeting softened concerns about debt-burdened countries.
The euro has fallen roughly 6 percent from a 17-month peak of $1.4940 hit less than two weeks ago as peripheral debt concerns resurfaced, with $1.40 seen as a key support level.
The dollar was flat against the yen at 80.76
The greenback fell 0.3 percent against a basket of six major currencies to 75.520 after climbing to a six-week high of 76.001 reached earlier in the day.
Trading Setups / Chart in Focus:
GBPUSD
The GBPUSD continued to move lower today as the large pin bar setup from last week continues to unwind; however with less force, forming an inside bar in the process. Should support at the mother bar low of 1.6145 break, we will likely see a move down towards the next support at 1.5970.
GBPJPY
The GBPJPY formed an inside bar today. Currently price is sitting near the mother bar low / trigger price of 130.90 from the fakey-pin bar setup last week. Should this bearish looking chart continue to roll over we don’t see much support until about 127.70, this level is easier to see on a weekly chart and it also happens to be near the event-area break out of the huge pin bar that formed after the Japan tsunami.
For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my Forex trading education website.
Other Markets:
On Wall Street today the Nasdaq sank, leading the way lower for U.S. stocks as investors sold recent winners as unease about U.S. economic weakness spread.
The Dow lost 47.38 points, or 0.38 percent, the S&P 500 lost 8.30 points, or 0.62 percent, and the Nasdaq dropped 46.16 points, or 1.63 percent.
Upcoming important economic announcements: 5/17/2011
4:30am EST: Britain – CPI y/y
5:00am EST: Euro-zone – German ZEW Economic Sentiment
Tentative: Britain – BOE Inflation Letter
8:30am EST: United States – Building Permits
6:45pm EST: New Zealand – PPI Input q/q