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EURUSD and EURJPY sell-off, 18th April 2011

Forex Commentary:

Fresh fears that Greece will have to restructure its mountain of debt, possibly as early as this summer, sent the euro and some euro zone bond prices tumbling on Monday as the bloc’s debt crisis escalated.

The euro fell to its lowest in almost three weeks against the yen. It last traded at 117.64 yen, down 1.9 percent.

The U.S. dollar index, which tracks the dollar against a basket of currencies, jumped to 75.502, a 0.9 percent gain.

Trading Setups / Chart in Focus:

EURUSD

The EURUSD dropped significantly lower today on the back of renewed concerns about the European debt crisis. We would need to see an obvious 4hr or daily bullish price action trading signal off support to consider taking a long. Note the EURUSD bounced at a minor support level near 1.4150 today, however further losses are possible into support near 1.4000.

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EURJPY

The EURJPY fell dramatically lower today as European debt worries gripped the markets and investors sought out the safe-haven yen across the board. We can see support sits near the previous breakout level from about 116.00 – 115.50. An obvious bullish pin bar trading signal from this key level could be a decent buy entry.

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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 training website.

Other Markets:

On Wall Street today U.S. stocks fell more than 1 percent as sovereign debt fears on both sides of the Atlantic weighed on markets. Also, China’s monetary tightening weakened the outlook for global economic growth.

Standard & Poor’s revised its outlook on the United States credit rating downward to “negative” on a poor U.S. budget outlook, while China took additional measures to curb liquidity.

The Dow lost 140.24 points, or 1.14 percent, the S&P 500 lost 14.54 points, or 1.10 percent, and the Nasdaq lost 29.27 points, or 1.06 percent.

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