Trading Setups / Chart in Focus:

GBPUSD

The Sterling / Dollar fell dramatically lower again today and only paused after finding some support around 1.5350. Note that this huge move lower was signaled by an obvious fakey with pin bar strategy from August 19th. There were also multiple entries to get in on this move as it moved lower, most recently the inside bar from Tuesday of this week

AUDUSD

The AUDUSD dropped like a rock today as equities and commodity-linked currencies took a big hit on poor global economic news. We can see price found support at longer-term support near 0.9700. However, the trend is clearly and down and traders can look to sell rotations into resistance on intra-day or daily bearish price action signals.

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Forex Commentary:

The U.S. dollar moved to a seven-month high against major currencies as investors fled risky assets and sought safety in Treasuries, where benchmark yields again touched lows not seen in 60 years.

A bad economic outlook from the U.S. Federal Reserve combined with new signs of slowing economies in China and Germany sent investors out of stocks and other bets on growth and into dollar-denominated assets such as Treasuries.

Market anxiety has also led to a steep sell-off in commodity-linked currencies that have fared well during global expansion, such as the Australian and Canadian dollars as well as emerging markets like the Mexican peso.

With further losses seen likely, the euro zone common currency slid through the 50 percent retracement level of the move from the June 2010 low to the May 2011 peak, hitting a session low of $1.3384, its weakest since Jan. 20.

Currencies linked to global economic growth declined, with the New Zealand dollar falling to its lowest level since May 17 and the Australian dollar slumping to its lowest level since March 17.

The dollar was down 0.2 percent against the yen at 76.290. With the yen not far from the record high of 75.94 set last month, investors are on high alert for intervention by the Bank of Japan to contain the currency’s strength.

Other Markets:

World stocks moved to 13-month lows today and commodities lost significant ground as well as weak data out of China and the euro-zone worked to solidify fears of a global recession only a day after a poor economic outlook from the U.S. Federal Reserve.

Gold even lost 5 percent today, which is traditionally considered a safe-haven, its lowest level in nearly a month.

The Dow lost 391.01 points, or 3.51 percent, the S&P 500 dropped 37.20 points, or 3.19 percent, and the Nasdaq was off 82.52 points, or 3.25 percent.

Upcoming important economic announcements: 9/23/2011

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