Forex Trade Setups Commentary: EURUSD and GBPUSD reject resistance, 1st June 2011

Forex Commentary:

The euro gave up its gains against the dollar late Wednesday after ratings agency Moody’s downgraded Greece’s credit rating yet again.

The euro fell to $1.4327 Wednesday in New York from $1.4394 late Tuesday. Earlier, the euro had traded as high as $1.4458 after several U.S. economic reports increased worries about a slowdown in economic growth.

Among the more notable moves after a report on jobs growth, the Japanese yen and Swiss franc strengthened against the euro and dollar. Both are low-yielding currencies where gains often signal investors are moving back toward safe havens and away from riskier assets.

Trading Setups / Chart in Focus:

EURUSD

The EURUSD rejected the resistance zone between 1.4350 – 1.4500 today. We can see a long-upper shadow bearish rejection bar formed on the daily chart today while a 4 hour chart pin bar trading strategy formed in the same resistance zone. Should price continue to fall over the next 48 hours, we could see a move towards support near 1.4000.

EURUSD 4-HOUR CHART:

GBPUSD

The GBPUSD has been trading between about 1.6150 – 1.6500 for the last month. Yesterday, a nice pin bar rejection setup formed near 1.6500 and has since come off aggressively lower. We discussed this setup yesterday in our members’ commentary. Support comes in down near 1.6150, and if price continues to fall we may see a re-test of this level in the near-term.

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 their four-day rally with the worst sessions since last August with the possibility of more losses in coming days as investors deal with more signs the economic recovery is faltering.

The Dow lost 279.42 points, or 2.22 percent, the S&P 500 lost 30.66 points, or 2.28 percent, and the Nasdaq lost 66.11 points, or 2.33 percent.

Upcoming important economic announcements: 6/2/2011

All Day: Switzerland – Bank Holiday
All Day: Euro-zone – French / German / Italian Bank Holiday
4:30am EST: Britain – Construction PMI
8:30am EST: United States – Unemployment Claims
6:45pm EST: New Zealand – Building Consents m/m