Forex Commentary:

The euro advanced to a 16-month high against the dollar on Tuesday, seemingly with little resistance ahead, as investors bet the U.S. Federal Reserve will lag other major central banks in raising interest rates.

The break to a new high opens up a test toward $1.48, and the euro could then test $1.50 in the coming weeks if Bernanke indicates that the Fed’s accommodative policy may continue for the foreseeable future, a Forex technical analyst said.

The Australian dollar was up 0.5 percent at $1.0777, very close to its post-float high of $1.0792 touched earlier in the New York session.

Against the Japanese yen, the U.S. dollar slipped to 81.55 yen from ¥81.89 late Monday. The dollar has lost about 2.1% against the yen this month.

One of the few exceptions on the day against the dollar was the British pound which bought $1.6476, compared with $1.6503 late Monday. Sterling is still up about 5.6% this year as traders expect interest rates there to rise sooner than in the U.S.

Trading Setups / Chart in Focus:

GBPUSD

The 4hr GBPUSD chart formed a fakey pin bar strategy today. If the inside bar within this fakey setup breaks to the upside, we could see a larger move and a resumption of the uptrend. Note this fakey pin bar is showing rejection of a horizontal support level through 1.6425.

GOLD

Gold formed a bullish rejection pin bar today, showing rejection of the 8 day EMA. Should the high of this pin bar break we could see a further push higher.

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Other Markets:

On Wall Street today stocks pushed higher on the back of continued positive corporate results. Stocks hit their best level since June 2008 today.

The S&P 500 pushed beyond the 1,344 level, which was seen as a key resistance level that needed to be breached to trigger further gains.

The Dow added 115.49 points, or 0.93 percent, the S&P 500 gained 11.99 points, or 0.90 percent, and the Nasdaq rose 21.66 points, or 0.77 percent.

Upcoming important economic announcements: 4/27/2011

4:30am EST: Britain – Prelim GDP q/q
8:30am EST: United States – Core Durable Goods Orders m/m
12:30pm EST: United States – FOMC Statement
12:30pm EST: United States – Federal Funds Rate
2:15pm EST: United States – FOMC Press Conference
5:00pm EST: New Zealand – Official Cash Rate
5:00pm EST: New Zealand – RBNZ Rate Statement
Tentative: Japan – Monetary Policy Statement
Tentative: Japan – Overnight Call Rate