Trading Setups / Chart in Focus:

Note:  I wrote a great article about Recent Price Action Trade Setups in The Current Market Volatility here

GBPUSD

The GBPUSD shot substantially higher today as price broke up and closed above 1.5700 resistance. We can see a resistance “zone” just above between 1.5775 and 1.5900 area, we can watch for price action sell-signals in this region but would also note that the current up move has been quite strong, so we would prefer to see an obvious daily chart signal form before considering a short. Note the counter-trend pin bar fakey setup off support that signaled the potential for this recent up move.

EURUSD

The EURUSD pushed substantially higher today as 1.3700 broke to the upside and price pushed into the resistance around 1.3800 – 1.3850. There are no signs of bearish price action right now, so we could see the counter-trend rally continue. Next resistance is near 1.4000 – 1.4050 and traders could watch this resistance for potential price action sell signals.

Check out this cool new Forex trading lesson: Nial’s Top 10 Forex Trading Lessons

Special Note: This Month I’m Offering A Discount On My Forex Trading Course and Price Action Traders Community. Members get Lifetime Access to my Professional Price Action Trading Course, daily trade setups commentary, live trading discussion forum, tutorial videos and articles, email support, and much more. To Find out More Visit the Forex Trading Course Page Here.

Forex Commentary:

The EURUSD pushed higher today, near a one-month high on the back of optimism that Slovakia will eventually vote to approve to expand the rescue fund that is critical to limiting Europe’s debt problem.

The EURUSD busted through resistance at $1.3700 and closed the day around $1.3790. The euro was up about 1.9 percent against the yen.

The U.S. dollar rose about 0.8 percent against the Japanese yen to close at 77.27 and hitting a one-month high of 77.48.

Other Markets:

On Wall Street today stocks pushed higher as progress towards strengthening Europe’s financial rescue fund injected more optimism into the market.

The Dow gained 102.55 points, or 0.90 percent, the S&P 500 added 11.71 points, or 0.98 percent, and the Nasdaq gained 21.70 points, or 0.84 percent.

Upcoming important economic announcements: 10/13/2011

Tentative: China – Trade Balance
8:30am EST: Canada – Trade Balance
8:30am EST: United States – Trade Balance
8:30am EST: United States – Unemployment Claims
10:00pm EST: China CPI y/y