Trading Setups / Chart in Focus:

Dow Jones Cash

The Dow Jones is moving lower after forming a bearish pin bar rejection of the 12000 resistance area. We discussed this setup thoroughly in our members’ area before it came off and I am personally short here and am watching support near 11680 as a potential target. It’s a bit of a higher risk trade since it was counter to the recent up move, but due to the obvious resistance level and the pin bar that showed clear rejection of it, the setup was confluent and valid.

AUDUSD

The AUDUSD continued its downward track today and we can see this market is quickly heading toward support near 0.9700. We would look to sell at resistance on a rotation higher and a bearish price action signal on the intra-day or daily charts.

Check out our latest price action trading lesson: How to Trade Key Chart Levels in Forex

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Forex Commentary:

In the currency markets today, the EURUSD dropped and closed below $1.30 after borrowing costs in Italy rose significantly higher at a bond auction and underscored fears about the euro-zone debt crisis.

The EURUSD fell to a low of $1.2945, before closing slightly higher around $1.2982, down from $1.3034 at Tuesday’s close.

The U.S. dollar was buoyant across the board today after yesterday’s Federal Reserve meeting provided no new mention of new stimulus measures, such measures tend to cause a country’s currency to weaken since it means more money is printed.

Other Markets:

In the U.S. markets today, stocks lost ground for a third day in a row, hitting their lowest level in two weeks as risk aversion caused commodities and equities to move lower and moved the euro to an 11-month low against the U.S. dollar.

Gold hit its lowest level since the beginning of October and commodity-related shares were sent lower by a strong U.S. dollar.

Crude oil for January delivery dropped $5.19 a barrel, or 5.18%.

The Dow lost 131.46 points, or 1.10 percent, the S&P 500 lost 13.91 points, or 1.13 percent, and the Nasdaq dropped 39.96 points, or 1.55 percent.

Upcoming important economic announcements: 12/15/2011

3:30am EST: Switzerland – Libor Rate
3:30am EST: Switzerland – SNB Monetary Policy Assessment
3:30am EST: Switzerland – SNB Press Conference
4:30am EST: Britain – Retail Sales m/m
8:30am EST: United States – PPI m/m
8:30am EST: United States – Unemployment Claims
10:00am EST: United States – Philly Fed Manufacturing Index