The euro sank to a 10-week low today against the U.S. dollar as last weekend’s rescue package for Ireland has done little to curb fiscal concerns in the euro-zone.
The Japanese yen gained significant ground against all the other major currencies today, gaining nearly 200 pips on the euro. The yen did give back some of its early session gains as the day came to a close in New York, but it still posted sizeable gains against all the majors, reflecting today’s theme of risk-aversion.
Trading Setups / Chart in Focus:
The AUDUSD has continued to push lower since we discussed the possibility that at least a short-term top was put in place in our commentary from 11/26.
We can see the relevant near-term support and resistance levels drawn in on the daily chart below. Resistance comes in near 0.9700 and the AUDUSD hit support near 0.9540 today, a break of this support could see prices fall into 0.9400, support beyond that lies near 0.9200.
The 4 hour AUDUSD fired off a nice bearish pin bar setup during yesterday’s price action, which resulted in price moving into support near 0.9540 today. This is an excellent example of trading price action from confluent levels and with the higher time frame trend.
For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my forex trading education website.
On Wall Street today stocks were under pressure from the euro-zone’s debt crisis, but they came off their intra-day lows as the trading day progressed.
The euro and stocks have been trading highly correlated with one another in recent weeks European debt problems resurfaced, this worked to drive investors away from riskier assets.
The CBOE Volatility Index, or VIX, rose 4.9 percent today, to 22.59, reflecting investors’ fear over short-term uncertainty in financial markets.
The Dow lost 46.47 points today, or 0.42 percent, the S&P 500 lost 7.21 points, or 0.61 percent, and the Nasdaq slipped 26.99 points, or 1.07 percent.
Upcoming important economic announcements: 12/1
3:00am EST: Britain – Nationwide HPI m/m
1st-7th: Britain – Halifax HPI m/m
5:30am EST: Britain – Manufacturing PMI
9:15am EST: United States – ADP Non-Farm Employment Change
11:00am EST: United States – ISM Manufacturing PMI
8:30pm EST: Australia – Retail Sales m/m
8:30pm EST: Australia – Trade Balance