Trading Setups / Chart in Focus:
The EURUSD lost more ground today, falling closer towards the lower end of the trading range seen in the chart below. We will watch support near 1.4000, should price fall into this level traders could watch for bullish price action near this support while keeping in mind we would need to see a valid daily price action signal at support to warrant trading against the bearish momentum.
The exhaustion signs we mentioned in yesterday’s members’ commentary ended up giving way to lower prices today as we discussed as a possibility. We can see the inside pin bar at the core resistance near 1.1000-1.1050 that signaled a move lower was possible.
Interesting that price has closed right on support near 1.0800 – 1.0775 today. If the rotation lower continues we could see a move back into the previous trading range and perhaps a significant move lower, otherwise we may consolidation near this support. There are not setups right now.
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The U.S. dollar hit a record low against the Swiss franc Tuesday on concerns about a slowdown in global economic growth. It rose against most of the world’s other currencies as investors sought safety.
The U.S. dollar fell to a record low of 0.7620 Swiss franc Tuesday, closing the day on this low, down sharply down from 0.7832 Swiss franc late Monday. The Swiss franc has soared about 22 percent this year against the dollar. It’s also trading at record highs against the euro, and is up nearly 15 percent versus the currency used by 17 European countries.
The euro was worth $1.4201, down from $1.4244 late Monday. Investors are concerned that Italy and Spain could still be dragged into the European debt crisis, despite last month’s agreement to strengthen the euro-zone’s bailout fund.
In other trading Tuesday, the British pound was nearly unchanged at $1.6295 from $1.6296, while the dollar ticked up to 96.10 Canadian cents from 95.65 Canadian cents. The dollar jumped against the Australian dollar, the Scandinavian currencies, and several emerging-market currencies.
On Wall Street today stocks fell significantly lower as fears about the fragility of the economic recovery caused all three major U.S. equity indexes to move down more than 2% for the day, and the S&P 500 is now negative for the year.
The Dow lost 266 points, or 2.2%, the S&P 500 lost 33 points, or 2.6%, and the Nasdaq lost 75 points, or 2.8%.
Upcoming important economic announcements: 8 /3/2011
4:30 am EST: Britain – Services PMI
8:15am EST: United States – ADP Non-Farm Employment Change
10:00am EST: United States – ISM Non-Manufacturing PMI
6:45pm EST: New Zealand – Employment Change q/q
6:45pm EST: New Zealand – Unemployment Rate
9:30pm EST: Australia – Trade Balance