Currency speculators trimmed bets against the dollar in the latest week and opened a long position in the yen for the first time in six weeks, data from the Commodity Futures Trading Commission showed on Friday.
The value of the dollar’s net short position fell to $27.68 billion in the week ended May 10, from a two-month high of $35.01 billion a week earlier, according to CFTC and Reuters calculations.
Speculators flipped to a a long yen position for the first time in six weeks but trimmed bets in favor of the euro, sterling and Australian dollar, the data showed.
Trading Setups / Chart in Focus:
The GBPUSD pin bar discussed in our commentary from Wednesday has come off very nicely to the downside. Take note of this pin bar as it is a very good one.
This pin bar setup had very good form and was larger than the surrounding bars, it had multiple factors of confluence as well; it was with the recent bearish momentum, it was rejecting an obvious horizontal level and both the 8 and 21 day EMAs; a very strong price action trading signal:
The gold pin bar from yesterday did see price break higher today but then pulled back and retraced over 50% of the pin today.
The low of the pin has not been violated yet, anyone who took this trade should have had their stop below the low of the pin ideally.
We could see a move higher next week from current levels IF price can remain above support at $1475.00 an ounce, but given the current volatility of commodities and U.S. dollar strength, continued bearish movement would not be surprising either; proceed with caution and manage risk wisely, as always.
Check out this article for a cool Forex trading lesson: The Human Mind Vs. Computers in Forex Trading
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.
On Wall Street today stocks ended two weeks of losses on a negative tone, confirming investors concerns that stocks might be on the edge of a bigger pullback.
The Dow dropped 100.17 points, or 0.79 percent, the S&P 500 lost 10.88 points, or 0.81 percent, and the Nasdaq lost 34.57 points, or 1.21 percent.
Upcoming important economic announcements: 5/15/2011
9:30pm EST: Australia – Home Loans m/m
9:00am EST: United States – Fed Chairman Bernanke Speaks
9:00am EST: United States – TIC Long-Term Purchases
9:30pm EST: Australia – Monetary Policy Meeting Minutes
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.