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Forex Commentary: EURJPY and GBPUSD update, 19th October 2010

EURJPY:

The EURJPY is losing momentum, we can see the 8 and 21 day moving averages are rolling over and look to cross lower soon. We would view any intra-day rallies in this pair as potential shorting opportunities on the back of quality bearish price action setups.

The 113.00 area has proved to be solid support recently, we would assume this level will might act as resistance should we see a rotation higher.

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GBPUSD:

The GBPUSD pin bar setup discussed in last Friday’s commentary has come off to the downside in what has been a huge move that was very profitable for keen price action traders. We are now looking to sell strength in this pair and see resistance in the 1.5830-1.5870 area. Should we get a nice intra-day bearish signal in this area we would look to get short.

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For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my website to learn forex trading.

Commentary:


The U.S. dollar gained substantial strength today as risk aversion picked up due to renewed concerns over U.S. banks and a surprise tightening of credit by China.

Commodity prices weakened today as well as feard in the U.S. mortgage market grew, crude oil futures fell 4.5 percent and gold fell nearly 3 percent.

The Japanese yen also gained considerable ground against the other majors except the U.S. dollar which was definitely today’s strongest currency.