Trading Setups / Chart in Focus:

EURUSD

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The EURUSD formed another pin bar today and provided savvy price action traders with the potential for a 50% entry of yesterday’s pin bar. If the low of today’s pin bar breaks we see the potential for a resumption of the downtrend and a re-test of support down near 1.3400 – 1.3360. If price rotates higher we could see a re-test of resistance near 1.3800.

GBPUSD

The GBPUSD formed a fakey pin bar strategy today, showing rejection of the resistance zone between 1.5700 – 1.5775. If price breaks down past the mother bar low we could see a resumption of the downtrend and a re-test of support near 1.5330.

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Forex Commentary:

The U.S. dollar recouped earlier losses today against multiple “risk” currencies after Fitch downgraded New Zealand’s sovereign rating. The NZDUSD lost approximately 1% today.

The greenback had lost ground earlier in the day after positive U.S. economic data and positive news out of the euro-zone regarding their debt crisis and the approval of a bigger European Financial Stability Facility.

The EURUSD was modestly higher today, up to $1.3596 from $1.3541 late Wednesday.
The greenback was modestly higher against the Japanese yen today and lost modest ground to the British pound after recouping much of its early-session losses against the Sterling.

Other Markets:

On Wall Street today stocks were mainly higher in what were volatile trading conditions. Initial applications for unemployment benefits moved to a five month low last week according to the U.S. Labor Department, this, combined with German Chancellor Angela Merkel’s intent to approve a beefed-up euro-zone bailout fund, worked to buoy investor sentiment today.

The Dow added 143.08 points, or 1.30 percent, the S&P 500 gained 9.34 points, or 0.81 percent, and the Nasdaq lost 10.82 points, or 0.43 percent.

Upcoming important economic announcements: 9/30/2011

5:30am EST: Switzerland – KOF Economic Barometer
8:30am EST: Canada – GDP m/m
9:00pm EST: China – Manufacturing PMI