Trading Setups / Chart in Focus:

Note:  I wrote a great article about Recent Price Action Trade Setups in The Current Market Volatility here

EURUSD

The EURUSD consolidated today and formed an inside bar after closing the day essentially unchanged from yesterday. If price continues to push higher and breaks above the mother bar high from today’s inside bar trading strategy, we could see another move higher and potential retest of 1.4050 resistance area where we could watch for price action sell signals.

The other alternative is for a false-break of 1.3835 resistance, in which we case we would have a potential short setup. We will wait and see what unfolds in the next 24hrs and update traders tomorrow.

AUDUSD

The AUDUSD moved modestly higher today but did not close above 1.0200 resistance. However, the current up move is looking buoyant and if price breaks above 1.0200 in the near-term, we could see a re-test of the next resistance around 1.0400. Note that the 8 / 21 day EMAs have crossed higher reflecting the recent bullish momentum in this market, but we are still viewing this up move as a counter-trend rally and we will watch for potential sell signals around 1.0400 resistance.

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Forex Commentary:

The EURUSD lost modest ground today as a slowing growth outlook for the euro zone as well as poor trade data out of China stoked concerns about slowing global economic growth. The EURUSD moved to $1.3775 today, down from $1.3790 yesterday.

The U.S. dollar lost 0.5 percent to the Japanese yen, falling about 0.5 percent.

The GBPUSD and AUDUSD were modestly higher today while the NZDUSD and USDCAD both lost modest ground in what was a relatively calm day in the currency markets.

Other Markets:

On Wall Street today stocks moved lower on the back of poor earnings from JPMorgan and weak trade numbers from China, this worked to renew worries about slow global economic growth.

The Dow dropped 40.72 points, or 0.35 percent, the S&P 500 lost 3.59 points, or 0.30 percent, and the Nasdaq added 15.51 points, or 0.60 percent.

Upcoming important economic announcements: 10/14/2011

8:30am EST: United States – Core Retail Sales m/m
8:30am EST: United States – Retail Sales m/m
9:55am EST: United States – Prelim UoM Consumer Sentiment