Forex Commentary: EURUSD consolidates above 1.4000, 19th July 2011

Trading Setups / Chart in Focus:

EURUSD

The EURUSD pin bar we discussed in last Thursday’s commentary did end up coming off lower and netted some of our members a nice 1:2 risk reward, however, price has since formed an opposing bullish pin bar and pushed higher; rotating back up on itself.

We are seeing some consolidation right now just above the 1.4000 level as price seems to be sandwiched between the dynamic resistance of the 8 / 21 EMA’s and the horizontal support near 1.4000. We will need to see a break of this consolidation area before price can make a clear directional move again.

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Forex Commentary:

The euro rose against the dollar on Tuesday on hopes policymakers may reach a deal to provide further aid for Greece at a summit later this week, though a lack of a long-term solution for the country’s debt crisis could keep the single currency vulnerable.

Higher-yielding currencies rallied as gains in stocks lifted risk appetite. The Australian dollar was up 1.1 percent. The New Zealand dollar rose to a post-float high against its U.S. counterpart of $0.8573. The New Zealand dollar was floated in March 1985.

Other Markets:

On Wall Street today stocks soared on the back of strong earnings from IBM and Coca-Cola, as well as progress on U.S. debt talks.

The Dow rallied after President Obama signaled his approval for a deal that would cut the U.S. federal deficit by $3.7 trillion.

The Dow added 202 points, or 1.7%, the S&P 500 gained 21 points, or 1.6%, and the Nasdaq rose 61 points, or 2.2%. The Nasdaq had its biggest one-day gain since October 2010.

Upcoming important economic announcements: 7/20/2011

4:30am EST: Britain – MPC Meeting Minutes
10:00am EST: United States – Existing Home Sales
10:30am EST: Canada – BOC Monetary Policy Report
11:15am EST: Canada – BOC Press Conference