Forex Commentary, AUDJPY Fakey-Pin Bar Combo Setup 3-15-10

Daily Forex Market Commentary:

The U.S. dollar traded higher today with Crude Oil closing lower by $1.44 a barrel, Gold was up modestly.

The greenback gained against all the major currencies except for losing by 2 pips to the New Zealand dollar. The U.S. Federal Reserve bank policy meeting tomorrow should help shed some light on which direction the major currencies are likely to take over the near term.

Looking ahead, most of the major FX pairs appear to be at rather significant inflection points. While the U.S. dollar has lost some ground over the recent weeks it is worth noting that the overall trend is still bullish for the greenback and that most of the bullish momentum that we have seen recently in equities and commodities has been on the back of rather light volume, generally an indication of an unsustainable rally.

Stocks:

On Wall Street today stocks staged a late day rally in response to a banking regulation proposal by U.S. senator Christopher Dodd that investors said did not offer any surprises for the financial sector.

World equities were down overall for the day though as investors became worried that China is likely to tighten credit in response to rising inflation, which could slow global growth.

Also of concern to investors today was the on-going Greece debt problem and specifically the lack of concrete progress on a financial aid package for the debt strapped country.

Currency pair in focus: AUD/JPY

We are looking at the daily chart of AUDJPY today. A fakey / pin bar combo setup has formed, this setup is generally very accurate and one of my favorite to trade.

We can see the resistance level this price action setup has occurred at. The pin bar tail is clearly showing rejection off the 83.50 level and the false break or fakey setup shows a failure to sustain price movement above 83.00.

This setup is a bearish price action setup and we can see the logical target area of 79.50 in the chart below. Check out my forex educational course for further instructions on how to use price action to profitably trade forex.

For a more in-depth analysis of the major FX pairs as well as daily forex market commentary on all the major pairs please check out my price action trading course.