Trading Setups / Chart in Focus:

GBPUSD

The GBPUSD has been consolidating just below resistance near 1.6200 recently. Today price formed an inside pin bar below this level, should we see a break above the mother bar high and 1.6200 resistance ,we could see a larger move to the upside. The next major resistance comes in near the event area at 1.6400-1.6450.

EURUSD

The EURUSD is showing consolidation between the support at 1.4000 and the high of last Thursday’s pin bar at 1.4280. Further consolidation is possible whilst price is below 1.4280; a break above this level could open the door for a larger move higher.

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Forex Commentary:

The euro rose against the U.S. dollar on Wednesday on hopes euro zone leaders would reach a deal to ease Greece’s debt burden, though concerns about contagion to other European economies should keep the bloc’s currency vulnerable.

Signs of progress on a U.S. budget deal also prompted a rise in risk tolerance. A group of Democrat and Republican senators, dubbed the “Gang of Six,” presented a new plan late on Tuesday that could revive stalled U.S. debt talks and avert a default by the world’s biggest economy.

The U.S. dollar fell 0.4 percent to 78.77 yen, while against a basket of major currencies, the dollar index slipped 0.5 percent to 74.806 .DXY.

Other Markets:

On Wall Street today stocks ended nearly unchanged as the oncoming debt ceiling deadline overshadowed strong earnings from Apple inc.

Apple stock jumped 2.7 percent today; another all-time high, one day after the maker of the iPhone and iPad reported quarterly revenues that far exceeded expectations.

The Dow lost 15.51 points, or 0.12 percent, the S&P 500 lost 0.89 points, or 0.07 percent, and the Nasdaq lost 12.29 points, or 0.43 percent.

Upcoming important economic announcements: 7/21/2011

4:30am EST: Britain – Public Sector Net Borrowing
4:30am EST: Britain – Retail Sales m/m
All Day: Euro-zone – EU Economic Summit
8:30am EST: United States – Unemployment Claims
10:00am EST: United States – Fed Chairman Bernanke Testifies
10:00am EST: United States – Philly Fed Manufacturing Index