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NIAL FULLER
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Forex Market Commentary: GBPUSD Pin Bar Reversal at Support, 12th February 2013

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By in Forex Trading Commentary Last updated on | 8 Comments

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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Forex Commentary:

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.

Other Markets:

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

  1. Jim February 14, 2013 at 12:41 pm

    Jack and Lewis thank you for your responses. I totally agree that makes very good sense.

    Reply
  2. Lewis February 14, 2013 at 8:06 am

    Jim, totally agree with Jack’s comments. Personally when trading counter to the main trend I’ll always go for a 50% retracement entry (offering a tight stop and therefore a much more realistic profit target).

    If we don’t get a 50% retracement, perhaps it’s 49%, perhaps there’s no retracement at all, then so be it, I’ll let the train go on without me and wait for my next good signal.

    Reply
  3. mink February 13, 2013 at 9:50 pm

    Stopped out for 110 pips!!

    Perfect bull trap!!!

    Great day for the pockets of the big boys!!

    Bad day for us!!

    Reply
  4. Jacek February 13, 2013 at 7:07 pm

    If you are waiting for a pullback there is a risk that trade will go without you. These retracements are not easy to get in. Sometimes price retraces 49% and then reverses. You never know. Still it is better to lose a chance than lose a money.

    Reply
  5. Jim February 13, 2013 at 4:50 pm

    This looks like it could be a huge reversal. My question is that sometimes really strong pin bars such as the one on Jan 2nd do not allow for the 50% retracement of the pin bar before taking off. How do you determine if you do the 50% retracement or get in right away and take the long trade with the wide stop of about 120 pips where it sits now?

    Thanks

    Reply
  6. Bram February 13, 2013 at 3:14 pm

    loVes it

    Reply
  7. David February 13, 2013 at 11:22 am

    Wonder why it is a false break ? The price already penetrated the support 1.562 ?

    Reply
  8. SHAQ February 13, 2013 at 10:33 am

    Hi Nail

    Thanks for update, kindly if possible let us the possible entry point do we follow 4 hr chart – just to look higher high and higher low to entry into the trade.

    Reply

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