Trading Setups / Chart in Focus:
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AUDUSD – Aussie/dollar continues to consolidate, watching for sell signal from resistance
The AUDUSD is still contained within a trading range between 0.8650 – 0.8900. If price rallies up to that 0.8900 key resistance level of the range we will watch for a price action sell signal there to rejoin the downtrend.
USDJPY – Dollar/yen pushed higher from pin bar signal
The USDJPY moved higher early in today’s session before giving back gains into the close. We can see that had you entered near the 50% retrace level of the 1 hour long-tailed pin bar buy signal we discussed in our October 15th commentary, you could have already netted a 1:2 risk reward on this trade. This is a big advantage of the 50% retrace entry / trade entry trick; it allows for a much higher likelihood of getting at least a 1:2 risk reward on a trade.
Latest Trading Lessons
In the currency markets today, the major currencies traded in small ranges ahead of Wednesday’s U.S. inflation data and Thursday’s European manufacturing reports.
The U.S. dollar fell 0.5 percent against the Japanese yen, while the euro gained about 0.37 percent on the greenback.
In the U.S. markets today, stocks moved higher, supported by strong corporate earnings. However, disappointing results from IBM contained gains in the Dow.
The Dow 19.26 points or 0.12%, the S&P 500 17.25 points or 0.91%, and the Nasdaq gained 57.64 points or 1.35%
Upcoming important economic announcements (New York time): 10/20/2014
8:30pm EST: Australia – Monetary Policy Meeting Minutes
10:00pm EST: China – GDP q/y
10:00pm EST: China – Industrial Production y/y
8:30pm EST: Australia – CPI q/q