GBPUSD and USDJPY recap, 19th May 2011
Seeking Alpha Analyst Since 2010
Forex Commentary:
The dollar slid on Thursday as weak U.S. economic data affirmed expectations the Federal Reserve will keep monetary policy ultra-loose for a while, keeping interest rates for the greenback very low compared with higher yielding currencies.
The euro climbed to a session high of $1.4326. In late afternoon New York trading, the euro pared some of its gains but was still up 0.4 percent at $1.4304.
In other trading Thursday, the dollar rose slightly to 0.8815 Swiss franc from 0.8814 Swiss franc but fell to 96.93 Canadian cents from 97.25 Canadian cents. Meanwhile, the dollar was flat against the Japanese yen at 81.77 and the British pound gained to $1.6214 from $1.6142.
Trading Setups / Chart in Focus:
GBPUSD
The GBPUSD formed an inside bar today, the pair has been consolidating for about 4 days now between the 8 day EMA dynamic resistance and the horizontal support at 1.6150.
As long as price remains below the dynamic resistance of the 8 / 21 day EMAs we could see further selling pressure resulting in a break below support near 1.6150 in the near-term. Alternatively, any upside moves will likely be capped at resistance near 1.6450 – 1.6520. Bias is neutral to bearish.
USDJPY
The USDJPY inside pin bar setup we discussed in yesterday’s commentary has broken higher today only to fall lower into the New York close forming a bearish pin bar reversal. Given that we are seeing conflicting signals in the USDJPY lately, we are neutral on the pair right now and will stand aside until things become clearer.
For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my price action trading course.
Other Markets:
On Wall Street today stocks pushed higher as LinkedIn’s shares doubled in its market debut. Shares of LinkedIn Corp (NYSE:LNKD) the social network company, more than doubled their IPO price in a jump reminiscent of the heyday of investors’ love affair with Internet stocks.
The Dow added 45.14 points, or 0.36 percent, the S&P 500 gained 2.92 points, or 0.22 percent, and the Nasdaq gained 8.31 points, or 0.30 percent.
Upcoming important economic announcements: 5/20/2011
Tentative: Japan – BOJ Press Conference
7:00am EST: Canada – Core CPI m/m
8:30am EST: Canada – Core Retail Sales m/m
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.