Gold pin bar, 29th April 2011
Seeking Alpha Analyst Since 2010
Forex Commentary:
The U.S. dollar hit a three-year low against a basket of currencies on Friday and is expected to decline for the a sixth straight week in the coming sessions on expectations the Federal Reserve will keep interest rates low while the European Central bank raises them.
The U.S. dollar index .DXY hit a three-year low of 72.834 on Friday and has now fallen for five straight months after tallying a 3.8 percent April decline.
The euro was on track to rally 4.7 percent against the dollar in April for its best month since September. The dollar fell 2.3 percent this month against the yen, its worst month since December
The Swiss franc rose to hit a record high of 0.8644 francs per dollar
Trading Setups / Chart in Focus:
Gold
Gold pushed higher today by over $26 an ounce, rising to a new all-time high closing price of $1562.25 an ounce on the back of a weakening U.S. dollar.
We can see a very well-defined and obvious pin bar trading strategy that formed on Tuesday showing rejection of the 8 day EMA with the dominant uptrend. This price action setup gave rise to substantial gains over the next three trading days and goes to show the power of simple price action strategies in trending markets.
Support comes in near the 8 and 21 day EMAs, and then further below at $1445.00.
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 rose on the back of strength from Caterpillar and other industrials, this sent the Dow and Nasdaq to their best monthly performance since December.
The Dow added 47.23 points, or 0.37 percent, the S&P 500 gained 3.13 points, or 0.23 percent, and the Nasdaq added 1.01 points, or 0.04 percent.
Upcoming important economic announcements: 5/2/2011
3:15am EST: Switzerland – Retail Sales y/y
9:00am EST: Britain – BOE Gov King Speaks
10:00am EST: United States – ISM Manufacturing PMI
6:45pm EST: New Zealand – Labor Cost Index q/q
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