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Gold pin bar, Euro recap, 12th May 2011

Forex Commentary:

The U.S. dollar turned lower Thursday, after hitting its highest level against the euro in more than six weeks, as commodities strengthened, turning equities higher and reducing the greenback’s appeal against riskier assets.

The dollar index DXY -0.18%, which measures the greenback against a basket of six currencies, slipped to 75.199, after rising as high as 75.645, compared with 75.259 late Wednesday.

The euro EURUSD bought $1.4242, up from $1.4211 in North American trading Wednesday. Earlier, it had touched its lowest level since early April.

The pound GBPUSD moved lower to $1.6289 from $1.6342 at Wednesday’s close.

The Australian dollar AUDUSD fell more than 1% early in today’s session, then pared the loss to buy $1.0661, down 0.3% from Wednesday.

Trading Setups / Chart in Focus:

Gold

Gold formed a large bullish rejection pin bar forex strategy today, off support that runs through about $1475.00. We could see a continuation of today’s late-day rally if the high of this pin bar breaks, there is some minor resistance near $1526.00 to be aware of, beyond this the next resistance is not until the all-time highs of $1575.00.

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EURUSD

The EURUSD moved lower early in today’s session; breaking down through support near 1.4155 before pushing higher forming a false-break of support. Price has the potential to rotate higher back into the 8 / 21 day EMA resistance zone before moving lower again. We will keep an eye on price action near this resistance.

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Other Markets:

On Wall Street today stocks moved higher led by defensive shares as investors dealt with mixed economic signals and the recent volatility in commodities.

The Dow gained 65.89 points, or 0.52 percent, the S&P 500 added 6.57 points, or 0.49 percent, and the Nasdaq gained 17.98 points, or 0.63 percent.

Upcoming important economic announcements: 5/13/2011

4:00am EST: Euro-zone – ECB President Trichet Speaks
8:30am EST: United States – Core CPI m/m
9:55am EST: United States – Prelim UoM Consumer Sentiment