Forex Commentary: EURJPY and GBPJPY recap, 23rd December 2010

Forex Commentary:

The U.S. dollar was weaker today against the other majors, with the exception being the Swiss franc, which it gained modest ground on.

Currency markets are likely to remain quiet until next week as most investors take time off of the markets for the holidays.

Trading Setups / Chart in Focus:

EURJPY

The EURJPY daily chart provided two solid opportunities to get short since last Friday that have since resulted in a bearish move and a test of support near 108.50. We first discussed the large bearish pin bar setup that occurred last Friday in our back-end member’s commentary before it came off to the downside on Monday. We can see this was a very profitable move in the chart below, and the signal was very obvious and confluent.

There was also an inside bar / pin bar setup that occurred on Tuesday of this week that provided a second entry into the last leg of this recent bear move.

GBPJPY 4HR

The GBPJPY 4hr chart fakey setup that we discussed yesterday, and that our member “rsd” first spotted in the member’s forum, has pushed further to the downside today, ending its fall near the daily support level of 127.50, a very solid 4hr setup with the trend.

For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my forex trading course.

Other Markets:

On Wall Street today stocks ended a fourth consecutive week of gains, investors expect optimism about the economic recovery to support equities through the years-end.

The S&P 500 ticked lower on Thursday, the close of a holiday-shortened week, breaking five days of gains, in the lowest volume in a full-day session this year. Banks dragged on the market, giving back recent gains after a strong month.

The Dow gained 14.00 points, or 0.12 percent, the S&P 500 fell 2.07 points, or 0.16 percent, and the Nasdaq lost 5.88 points, or 0.22 percent.

Upcoming important economic announcements: 12/24

All day: Euro-zone – German Bank Holiday
All day: Euro-zone – Italian Bank Holiday
All day: United States – Bank Holiday