Trading Setups / Chart in Focus:

EURUSD

The EURUSD stalled at resistance today near 1.4500-1.4550. We can see this recent up move occurred after a false-break lower from the mother bar / inside bar combination seen in the chart below. Price could be building momentum for a potential breakout to the upside as we can see the moves lower have seen decent buying pressure; and the weekly chart is showing a wedge formation in context of a longer-term uptrend.

There is nothing to do at the moment but be aware of the levels and price action, given that this market is in an obvious trading range we could see a rotation lower into support near the bottom of the range if price stays below resistance near 1.4550 area.

AUDUSD

We’ve been watching the retrace higher in the AUDUSD for a few days now, noting that there’s a possibility of a stall-out and watching for potential short signals near resistance. Price has pushed higher and tested resistance in the 1.0600 region today, showing some rejection of these higher levels that suggests weakness may be in the cards.

As we have said previously, in this market we want price action “confirmation” to occur to signal a position to join the trend which is still currently down in the short term. We can see the resistance at 1.0600 on the chart being quite significant and we would need to hold below these levels on a closing basis to remain short biased.

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Forex Commentary:

The U.S. dollar slumped against major counterparts Wednesday as global economic uncertainties lured investors to commodities.

The dollar index, which tracks the performance of the greenback against a basket of six major currencies, traded at 73.697 compared with 73.967 late Tuesday.

The EURUSD climbed to $1.4424 from $1.4406 in North American activity late Tuesday.

The dollar slipped versus the Japanese yen, trading at 76.50 yen compared with ¥76.75 late Tuesday.

Other Markets:

On Wall Street today tech shares fell after a disappointing sales outlook from Dell stoked worries that weak economic growth will hurt third quarter earnings.

The Dow added 4.28 points, or 0.04 percent, the S&P 500 gained 1.12 points, or 0.09 percent, and the Nasdaq lost 11.97 points, or 0.47 percent.

Upcoming important economic announcements: 8 /18/2011

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