Forex Commentary: EURUSD and AUDUSD recap., 23rd November 2010

Forex Commentary:

The U.S. dollar index, which tracks the U.S. dollar against a basket of six other currencies, was up 1.3% today. Rising global tension over the conflict between North and South Korea, as well as increasing concerns about the debt crisis in Europe caused investors to park their money in safe assets like the U.S. dollar, Japanese yen, and gold.

The euro lost significant ground today, German Chancellor Angela Merkel commented on the grave scenario facing the euro, saying it is an “extraordinarily serious situation.”

Trading Setups / Chart in Focus:

EURUSD

The EURUSD moved lower again today, continuing the move lower from yesterday off resistance near 1.3775. The 1hr bearish pin bar setup discussed in yesterday’s commentary has now netted price action traders some serious pips.

AUDUSD:

The AUDUSD rejected resistance near 0.9950 yesterday, today price moved lower into support near 0.9700. A clean break of this support area could lead to a re-test of support near 0.9400, prices could also bounce from the 0.9700 support area and consolidate between 0.9950 – 0.9700.

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Other Markets:

On Wall Street today stocks lost substantial ground as tensions between North and South Korea rose dramatically after the North opened fire on a South Korean island killing two South Korean marines.

Uncertainty about the severity of the euro-zone debt crisis and a lower economic outlook from the Federal Reserve also worked to lower investor enthusiasm.

The Dow lost 142.44 points, or 1.27 percent, the S&P 500 lost 17.11 points, or 1.43 percent, and the NASDAQ lost 37.07 points, or 1.46 percent.

Upcoming important economic announcements: 11/24

5:00am EST: Euro-zone – German Ifo Business Climate
5:30am EST: Britain – Revised GDP q/q
9:30am EST: United States – Core Durable Goods Orders m/m
9:30am EST: United States – Unemployment Claims
11:00am EST: United States – New Home Sales
8:30pm EST: Australia – Private Capital Expenditure q/q