Forex Trade Setups Commentary: EURUSD pin bar update / Gold inside bar, 26th October 2010

Forex Trade Setups Commentary: EURUSD pin bar update / Gold inside bar

EURUSD:

The EURUSD pin bar discussed in yesterday’s commentary has broken to the downside today, closing lower by just over 100 pips from yesterday.

We can see this pair is beginning to trade in a range between about 1.4000 and 1.3700. Many traders that caught yesterday’s pin bar setup are now in a “free trade” and looking for a possible move down to re-test support near 1.3700.

Gold:

Gold formed an inside / pin bar today and last Friday it formed a small bullish pin bar as we can see in the chart below. Is gold setting up to challenge the recent all-time highs near $1387? It is unclear at this point, but given the recent strength of the uptrend it is definitely a possibility. Keep in Mind, this setup needs to see a momentum trigger to break obvious resistance just above current prices, that would see a move up into the UK/New York Session. The risk of failure of this setup is high unless the gold chart can follow through above resistance at 1349 area.

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Commentary:

The U.S. dollar advanced today, rising about 0.8 percent against a basket of other currencies. However, the greenback did lose substantial ground do the British pound after better than expected British GDP numbers caused a surge to the upside in the GBPUSD.

The Japanese yen was weaker today against the other majors, however against the euro it ended the day flat. Today’s clear winner in the forex market was the British pound which rose about 120 pips against the U.S. dollar and over 130 pips against the euro.

Today’s session brought a slowdown in the recent inverse correlation between stocks and the dollar; stocked edged higher and the dollar advanced 0.8 percent against a basket of major currencies.

The Dow added 5.41 points, or 0.05 percent, the S&P 500 added 0.02 point, and the Nasdaq added 6.44 points, or 0.26 percent.