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GBPUSD rotates lower, 24th August 2011

Trading Setups / Chart in Focus:

GBPUSD

The Sterling / Dollar rotated lower today as price could not find the strength to sustain itself above 1.6500.

We’ve been discussing the potential for a move lower as long as price stayed contained under 1.6500 for the past few days now. The fakey pin bar strategy from Friday as well as yesterday’s pin bar reversal, both showed rejection of a core resistance area, and were strong signs that a rotation lower was possible.

Some of our members’ in the forum traded this obvious price action setup and were discussing it over the weekend and the last few days. This was a good example of high-probability price action trading.

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Forex Commentary:

The U.S. dollar rose against major currencies on Wednesday, erasing early losses, on fears the Federal Reserve may not signal new stimulus for the economy this week.

The yen slipped against the dollar and euro after Japan unveiled new steps to curb its currency’s strength and after Moody’s downgraded the country’s sovereign debt.

The euro was last down 0.1 percent at $1.4418, while against the yen the dollar reversed early losses to trade up 0.4 percent at 76.99 yen

Other Markets:

On Wall Street today U.S. stocks made strong gains for the second consecutive day as investors bought up beaten-down financial shares and dumped safer assets like gold in what was a volatile trading session.

Investors are anticipating a key speech from Fed Chairman Ben Bernanke on Friday.

The Dow added 142.51 points, or 1.28 percent, the S&P 500 gained 15.19 points, or 1.31 percent, and the Nasdaq gained 21.63 points, or 0.88 percent.

Upcoming important economic announcements: 8 /25/2011

8:30am EST: United States – Unemployment Claims
7:30pm EST: Australia – RBA Gov Stevens Speaks