Daily Forex Market Commentary

The U.S. dollar was mostly lower today against the major currencies as equities and commodities gained again. U.S. oil futures rose to an 18-month intraday high above $85 a barrel after economic data showed further signs of improvement within the U.S. economy. Gold was also higher today.

The greenback lost ground to the euro, pound, Australian dollar, and Canadian dollar, while gaining modestly on the New Zealand dollar, Swiss franc and moderately on the Japanese yen.

Looking ahead, most financial markets will be closed tomorrow for Good Friday. The U.S. unemployment report that will be released tomorrow is expected to show a substantial gain in employment in the U.S. This could mean further equity and commodity strength into next week and a continuation of the recent greenback weakness. However, if the number comes in substantially lower than expectations it could signal a return to U.S. dollar strength and Japanese yen strength as investors would likely flee back to safe haven currencies.

Stocks:

On Wall Street today The Dow and S&P rose thanks to positive economic data, however, the Nasdaq was relatively flat as investors aggressively sold shares of Research in Motion (RIMM) after negative results.

The U.S. stock market will be closed for Good Friday the same day the highly anticipated March unemployment report is released, many investors chose to take profits before the extended Easter holiday weekend halting an early session run-up of around 1 percent.

Materials, energy, and major manufacturing companies led the Dow and S&P gains as Thursday’s data implies strengthening global demand for commodities.

The Dow was up 70.44 points on the first day of the new quarter, the S&P rose 8.67 points, and the Nasdaq Composite Index climbed 4.62 points.

Currency pair in focus: GBP/USD

Today we are looking at two inside bar setups that set off very decent moves in the GBPUSD. We can see in the chart below the first inside bar formed just beneath resistance near 1.5380-1.5320, the market proceeded to sell-off from this level, using the inside bar as an entry signal you could have set targets just above support near 1.4800 and easily obtained a risk to reward of 1:3 or higher.

The second inside bar setup occurred last Friday just above 1.4800 support and has since shot up to just below 1.5300. Inside bar setups off horizontal support and resistance are great price action setups. Check out some great videos on the inside bar and other setups here: Forex videos

For a more in-depth analysis of the major FX pairs as well as price action training, please check out my forex trading course.