Forex Trade Setups Commentary: EURUSD and GBPUSD close off highs, 16th December 2011

Trading Setups / Chart in Focus:

EURUSD

The EURUSD pushed modestly higher today but closed the day well of its highs forming a small pin bar that created a false-break of the mother bar and inside bar structure from the last two days. We would have preferred to see this setup form closer to 1.3150, but if the mother bar low breaks we could indeed see lower prices next week. If the rotation higher continues we will watch resistance near 1.3150 and slightly higher for potential sell signals to rejoin the downtrend.

GBPUSD

The GBPUSD pushed higher early in today’s session but could not maintain higher prices closing the day well off the highs and creating a false break of the inside bar / mother bar from the last two days and showing rejection of the 8 day EMA resistance layer. We would need to see a break of support near 1.5400 and the mother bar low from Wednesday to see a continuation of the downtrend.

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Forex Commentary:

In the currency markets today, the euro was buoyant against the U.S. dollar but lost some ground into the New York close as new credit warnings from ratings agency Fitch came against six euro-zone countries.

The U.S. dollar was relatively quiet against all the majors today as trading became lighter ahead of the holiday season.

Other Markets:

In the U.S. markets today, an intra-day rally lost strength into the close as investors were stuck between optimism over better U.S. economic data and pessimism over the European debt crisis.

The Dow lost 2.42 points, or 0.02 percent, the S&P 500 added 3.91 points, or 0.32 percent, and the Nasdaq gained 14.32 points, or 0.56 percent.

Upcoming important economic announcements: 12/18/2011

7:00pm EST: New Zealand – NBNZ Business Climate

12/19/2011

10:30am EST: Euro-zone – ECB President Draghi Speaks
7:30pm EST: Australia – Monetary Policy Meeting Minutes