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GBPUSD fakey/pin, EURUSD recap, 21st April 2011

Forex Commentary:

The U.S. dollar fell broadly for a third straight day on Thursday as record low interest rates and the crushing weight of the U.S. budget deficit pushed it closer to an all-time trough against major currencies.

The dollar’s slide accelerated days after Standard & Poor’s slapped a negative outlook on the United States’ top AAA credit rating. The agency said a downgrade was possible if authorities can’t slash the massive U.S. budget deficit within two years.

That prompted investors, from fund managers to foreign central banks that hold trillions of dollars in assets, to opt for anything but the U.S. currency.

The euro soared to a 16-month high above $1.46 before easing to $1.4550, while the dollar fell 0.8 percent to 81.82 yen. The Australian dollar rose above $1.07, its highest in nearly three decades, as Australia’s 4.75 percent interest rate and its role as a supplier of raw materials to booming Asian markets attracted investors.

Trading Setups / Chart in Focus:

GBPUSD

The GBPUSD shot higher today as price rocketed past resistance near 1.6400. We can see in the chart below that a fakey pin bar trade setup formed recently prior to price breaking higher. The fakey with pin bar setup is a very quality price action trading strategy that I cover in-depth in my member’s area.

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EURUSD

The EURUSD formed a counter-trend pin bar today. Given the strength of this uptrend we are currently only watching the long side, so this is not a setup we recommend taking. But, should price rotate lower we will watch the dynamic support between the 8 and 21 day EMAs for potential bullish price action trading setups to rejoin the uptrend.

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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 strategies education website.

Other Markets:

On Wall Street today U.S. stocks ended their first positive week out of the last three as strong earnings news continued to lift shares.

The Dow added 52.45 points, or 0.42 percent, the S&P 500 gained 7.02 points, or 0.53 percent, and the Nasdaq added 17.65 points, or 0.63 percent.

Upcoming important economic announcements: 4/22/2011

Bank Holiday.