GBPUSD and GBPJPY recap, 9th May 2011
Forex Commentary:
The dollar rose against the euro early in Monday trading as Europe’s long-running debt crisis spooked investors, with Standard & Poor’s cutting Greece’s debt further into junk status. However, the euro pared losses in to the New York close to close up modestly against the greenback.
The commodity-driven Canadian dollar pushed higher against the greenback on Monday, as a rebound in energy and metal prices trumped worries about European sovereign debt. The Australian dollar also regained some of last week’s lost ground today.
In other trading Monday, the British pound rose to about $1.6400 from $1.6395 Friday. The dollar fell to 80.39 Japanese yen from 80.58 Japanese yen, and fell to 0.8726 Swiss franc from 0.8787 Swiss franc.
Trading Setups / Chart in Focus:
GBPUSD
The GBPUSD formed a bullish pin bar on the daily chart today. However, this pin bar is not sitting at an obviously confluent level and has formed after about 6 days of selling that included two bearish pin bars and a break below support near 1.6430 which is now acting as resistance.
As we don’t like buying into resistance, we are cautious about taking a long below 1.6430 here, we would prefer to see something form near a more confluent level like 1.6150 or 1.5950; support marked on the chart below. That said, a strong break above 1.6430 could give this pin bar some legs to shoot higher.
GBPJPY
GBPJPY has formed a series of inside bars below resistance at 132.90, the 8 / 21 day EMAs are crossed lower and we have seen some selling pressure in this market recently. We could see a drop lower if these inside bars breakdown past the mother bar. However, we could also see a false-break below this level and some sideways chop before this market makes its mind up.
For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my Forex trading training website.
Other Markets:
On Wall Street today stocks rose on the back of commodity-related shares, masking deeper concerns about what will sustain a longer rally in the market.
The Dow added 45.94 points, or 0.36 percent, the S&P 500 gained 6.09 points, or 0.45 percent, and the Nasdaq added 15.69 points, or 0.55 percent.
Upcoming important economic announcements: 5/10/2011
Tentative: China – Trade Balance
5:30am EST: Australia – Annual Budget Release
5:00pm EST: New Zealand – RBNZ Financial Stability Report
10:00pm EST: China – CPI y/y
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