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GBPJPY pin bar, 3rd February 2011

Forex Commentary:

The euro fell broadly on Thursday and could extend losses after European Central Bank President Jean-Claude Trichet threw cold water on expectations euro zone interest rates would rise any time soon.

His comments disappointed investors who had expected a more hawkish statement after recent inflation data came in above forecast. Expectations the ECB would lift interest rates sooner than the Federal Reserve boosted the euro in recent weeks.

The euro fell more than 2 cents on the day, moving further away from a 12-week high of $1.3862 set on Wednesday. It was last down 1.3 percent at $1.3626

The euro lost 1.2 percent to 111.24 yen. It also traded sharply lower versus the Swiss franc.

The dollar was up 0.1 percent at 81.64 yen, while an index measuring the dollar against a basket of six currencies, rose 0.9 percent to 77.844, rebounding from a 12-week low set on Wednesday.

Trading Setups / Chart in Focus:

GBPJPY

The GBPJPY formed a bearish pin bar setup today that is showing clear rejection of resistance near 132.50 – 133.00. If price begins moving lower and breaks the low of this pin bar, we may see a larger move back down to the bottom of this recent trading range near 129.75

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

Other Markets:

On Wall Street today stocks ended near the day’s highs, as investors favored shares of retailers after encouraging chain-store sales raised confidence before tomorrow’s monthly jobs report.

The Dow added 20.29 points, or 0.17 percent, the S&P 500 added 3.07 points, or 0.24 percent, and the Nasdaq gained 4.32 points, or 0.16 percent.

Upcoming important economic announcements: 2/4/2011

3:00am EST: Britain – Halifax HPI m/m
7:00am EST: Canada – Employment Change
7:00am EST: Canada – Unemployment Rate
8:30am EST: United States – Non-Farm Employment Change
8:30am EST: United States – Unemployment Rate
10:00am EST: Canada – Ivey PMI