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GBPUSD daily and 4hr recap, 28th February 2011

Forex Commentary:

The U.S. dollar slipped to a 3-1/2-month low against major currencies on Monday and may extend losses on speculation Federal Reserve Chairman Ben Bernanke will continue to support stimulus policy.

The euro hit a near one-month high above $1.3850 ahead of an interest-rate meeting by the European Central Bank on Thursday.

The U.S. dollar index, which tracks the greenback’s performance against a basket of major currencies, declined to 76.756, its lowest level since Nov. 9.

Trading Setups / Chart in Focus:

GBPUSD

The GBPUSD shot higher today, closing the day near resistance that comes in around1.6275. The daily chart is showing price challenging this multi-month resistance area, should we get a break above 1.6275-1.6300 we could see another leg higher.

The 4 hour pin bar setup we discussed in our member’s commentary last Friday came off aggressively to the upside today, providing traders with an easy 1:2 risk / reward opportunity. This was an obvious price action setup in-line with the dominant daily uptrend and showing rejection of 1.6030 support.

Daily chart:

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4-hour chart:

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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 trading website.

Other Markets:

On Wall Street today stocks ended another good month after bullish comments from Warren Buffett, however, uncertainty about oil prices could keep investors from extending the rally much more.

The Dow added 95.89 points, or 0.79 percent, the S&P 500 gained 7.35 points, or 0.56 percent, and the Nasdaq gained 1.22 points, or 0.04 percent.

Upcoming important economic announcements: 3/1/2011

2:00am EST: Britain – Nationwide HPI m/m
4:30am EST: Britain – Manufacturing PMI
5:00am EST: Britain – Inflation Report Hearings
9:00am EST: Canada – BOC Rate Statement
9:00am EST: Canada – Overnight Rate
10:00am EST: United States – Fed Chairman Bernanke Testifies
10:00am EST: United States – ISM Manufacturing PMI
7:30pm EST: Australia – GDP q/q