Forex Commentary: EURUSD 4hr pin bar, 18th January 2011

Forex Commentary:

Central bank buying and strong German economic data pushed the euro to a one-month high above $1.34 on Tuesday, though doubts about Europe’s ability to boost a sovereign rescue fund trimmed its gains in New York trade.

The dollar recovered from a 2-1/2-year low of 0.9837 Canadian dollars after the Bank of Canada kept interest rates at 1 percent and signaled it may stand pat for longer than markets had expected.

Trading Setups / Chart in Focus:

EURUSD

The EURUSD pin bar setup discussed in yesterday’s commentary was invalidated during today’s price action via price breaking the high of the pin, however the EURUSD 4hr chart formed yet another well-defined bearish pin bar showing rejection of this 1.3450 resistance area today.

If we are to get a move to the downside like we have off the other recent bearish pin bars on this chart, price will need to stay below 1.3450. Momentum has certainly been bullish recently so we could get a move higher even with today’s obvious rejection of resistance via this pin bar setup, so anyone taking this setup should at least wait for confirmation via a break of the low of the pin.

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Other Markets:

On Wall Street today U.S. stocks moved higher, overcoming weak Citigroup results and concerns regarding Apple after Chief Executive Steve Jobs’ medical leave.

The Dow rose 50.55 points, or 0.43 percent, the S&P 500 added 1.78 points, or 0.14 percent, and the Nasdaq added 10.55 points, or 0.38 percent.

Upcoming important economic announcements: 1/19/2011

4:30am EST: Britain – Claimant Count Change
8:30am EST: United States – Building Permits
10:30am EST: Canada – BOC Monetary Policy Report
11:15am EST: Canada – BOC Press Conference
4:45pm EST: New Zealand – CPI q/q
9:00pm EST: China – CPI y/y
9:00pm EST: China – GDP q/y