Trading Setups / Chart in Focus:
GBPUSD – Sterling/dollar pin bar reversal signal
In recent commentaries we’ve discussed the downtrend in the GBPUSD and that we were looking to sell from retraces back to resistance. Today, the market tried to move lower early in the session, but as the New York close drew near, the market had reversed all its earlier losses and ended the day up slightly. This price action resulted in a bullish pin bar reversal strategy that also created a false-break of 1.5630 support. Whilst this pin bar signal is counter-trend, it is also well-defined / obvious and is showing clear rejection and a false break of 1.5630 support, indicating that a move higher may be on the cards. If the market does move higher from this pin bar we see key resistance coming in near 1.5830 – 1.5870 and any moves higher could be contained below that level in the near-term. Still, there’s potential for a solid 1:2 risk reward from this pin bar setup if price pops up into that resistance zone.
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In the currency markets today, the Japanese yen moved higher against the other majors after an official from the G7 voiced concerns about continuing yen weakness.
The U.S. dollar weakened against most of the other majors today after giving up early-session gains.
In the U.S. markets today, stocks were mostly higher as investors looked forward to Obama’s State of the Union address on Tuesday night which is expected to focus on the economy and jobs.
The Dow added 58.06 points, or 0.42 percent, the S&P 500 added 3.34 points, or 0.22 percent, and the Nasdaq lost 1.91 points, or 0.06 percent.
Upcoming important economic announcements (New York time): 2/13/2013
5:30am EST: Britain – BOE Gov King Speaks
5:30am EST: Britain – BOE Inflation Report
8:30am EST: United States – Core Retail Sales m/m
8:30am EST: United States – Retail Sales m/m
10:00am EST: United States – Treasury Sec Nominee Lew Speaks
Tentative: Japan – Monetary Policy Statement
Tentative: Japan – Overnight Call Rate