Forex Commentary:

The U.S. dollar rose against the euro and other major currencies today and metals and grains dropped.

Silver for July delivery dropped 7.6 percent today, following a 5.2 percent drop on Monday. Gold lost $16.70 an ounce to end the day at $1,540.40 an ounce. Oil was also lower today as a result of a stronger U.S. dollar.

The GBPUSD dropped 1.1% to $1.6470 after U.K. economic data indicated a further slowdown in manufacturing expansion.

The Australian dollar and Canadian dollar also lost ground to the greenback today. The AUDUSD declined about 100 pips from yesterday’s close and the USDCAD gained about 22 pips after losing ground early in today’s session.

Trading Setups / Chart in Focus:

AUDUSD

The AUDUSD bearish pin bar setup discussed in yesterday’s commentary came off lower today. There was also a well-formed 4 hour bearish fakey pin bar setup that came off lower today, which formed within yesterday’s price action.

We can see price moved into the 8 day EMA. Support sits just below near 1.0775 and then further below at 1.0580.

GBPUSD

The GBPUSD formed a minor fakey trading strategy yesterday that triggered a short entry today as the pin bar from last Thursday broke lower today, causing a large move to the downside that stopped just above support at the 21 day EMA. We are watching for a bullish daily or 4 hour price action setup to tip us off that the uptrend is ready to resume.

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.

Other Markets:

On Wall Street today stocks fell as investors grew nervous over the sustainability of the rally on the back of new worries about earnings growth in the coming quarters.

The Dow gained 0.15 points, or 0.00 percent, the S&P 500 lost 4.60 points, or 0.34 percent, and the Nasdaq dropped 22.46 points, or 0.78 percent.

Upcoming important economic announcements: 5/4/2011

2:00am EST: Britain – Nationwide HPI m/m
4:30am EST: Britain – Construction 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 – Building Approvals m/m
9:30pm EST: Australia – Retail Sales m/m