EURUSD losing momentum, GBPUSD bearish pin bar, 11th May 2011
Seeking Alpha Analyst Since 2010
In the foreign exchange market, the euro dropped to a three-week low against the dollar as investor’s unwound risky trades in commodities and higher-yielding currencies and bought back the greenback in a flight to quality bid.
The euro dropped to $1.4196 late Wednesday from $1.4396 Tuesday. It was worth more than $1.49 just one week ago.
The British pound move above $1.65 early in the day but fell to $1.6343 in late trading, down from $1.6349 late Tuesday. The dollar traded at 80.97 Japanese yen after peaking above 81 yen earlier in the day. The dollar was worth 80.78 yen late Tuesday.
In other trading, the dollar rose to 95.97 Canadian cents from 95.89 Canadian cents and gained to 0.8843 Swiss franc from 0.8811 Swiss franc.
Trading Setups / Chart in Focus:
The EURUSD pin bar inside bar setup discussed yesterday did not trigger to the upside today because the mother bar high was never broken, we discussed this being a prerequisite for entry in yesterday’s commentary.
Momentum is clearly shifting from positive to negative in the EURUSD. We can see the 8 and 21 day EMAs have crossed lower as price has made quite a dramatic decline recently. Currently price is sitting at support near 1.4150, should this support give way we will likely see further losses. Alternatively, we may see a rotation higher into the 8/21 day EMA resistance before price heads lower again.
The GBPUSD formed a long-tailed bearish pin bar today. This pin bar is clearly rejecting resistance near the 8 / 21 day EMAs and through the horizontal level at 1.6430. Lower prices are possible should the pin bar low break, support comes in next near 1.6150.
For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my Forex trading education website.
On Wall Street today stocks almost erased a three-day rally on the back of declining energy and other commodity shares, fueling worry about the sustainability of the rally.
The Dow dropped 130.33 points, or 1.02 percent, the S&P 500 lost 15.08 points, or 1.11 percent, and the Nasdaq dropped 26.83 points, or 0.93 percent.
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