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EURJPY pin bar, EURUSD testing resistance, 17th March 2011

Forex Commentary:

The Japanese yen pulled back from a record high against the U.S. dollar today, ahead of a conference call by the Group of Seven finance ministers over fears officials may intervene soon to combat the recent ascent in the yen.

A Dow Jones news report quoted an unnamed source as saying Japan’s ministry was “ready for battle” on the yen. A G7 source said G7 nations are not expected to agree firm policy action but will offer solidarity to Japan and review its plight.

The EURUSD rose to 1.40534, a new high for 2011, after strong demand at a Spanish bond auction and on the view that euro-zone interest rates will soon rise.

Trading Setups / Chart in Focus:

EURJPY

The EURJPY has formed a very long-tailed pin bar trading strategy, thus price has the potential to rotate higher back into value near the 8 and 21 day EMA. Traders should keep a close eye on this dynamic resistance area for potential bearish price action to join the larger downtrend.

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EURUSD

The EURUSD hit a fresh high for 2011 today near 1.4053. We can see in the chart below that resistance near 1.4050 was tested today but price did not close above this level.

If we get another test and price breaks higher, we could see another leg to the upside, the 1.4050 area would then be seen as support, with the next resistance sitting near 1.4280.

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

Other Markets:

On Wall Street today U.S. stocks rebounded after three days of losses. However, the rise could be temporary as concerns about Japan’s nuclear crisis persist.

Today’s trading saw lackluster volume, with 7.95 billion shares traded vs. last year’s daily average of 8.47 billion shares. On Wednesday, a record was set for the year with 11.1 billion shares changing hands.

The Dow rose 161.21 points, or 1.39 percent, the S&P 500 added 16.81 points, or 1.34 percent, and the Nasdaq gained 19.23 points, or 0.73 percent.

Upcoming important economic announcements: 3/18/2011

7:00am EST: Canada – Core CPI m/m