Forex Trade Setups Commentary: Warning Signs in the air – Reversal Signals on major FX Pairs, 10-7-10

Forex Trade Setups Commentary: Warning Signs in the air – Reversal Signals on major FX Pairs. Short-term pull back due after reversal signals… caution ahead

The forex market threw in some warning signals today of a possible impending reversal in most of the major FX pairs.

We are looking at the daily charts of the AUDUSD, Gold, and the GBPUSD respectively. Note the AUDUSD broke to new 27 year highs before reversing lower and failing to close above resistance at the 27 year high near 0.9850.

Gold formed a huge bearish reversal candle today that looks like it has the potential to give birth to at least a short-term rotation lower.

Perhaps the most solid signal today was the GBPUSD bearish pin bar that rejected resistance near 1.6000 today. This pair looks to have some room to fall to the downside as the next support is not until about 1.5670.

Note: these signals are all counter-trend but at the very least are still signals to watch for possible short-term pullbacks.

AUDUSD: Gold:

GBPUSD:

For a more in-depth analysis of the major forex currency pairs and price action analysis, please check out my forex trading course.

Commentary:

The U.S. dollar rebounded today after falling to a 15 year low against the Japanese yen. The greenback also reversed most of its early session losses against the euro after the euro moved above $1.4000, making another multi-month high.

Perhaps bigger news out of the forex market today was the U.S. dollar weakening to all-time lows against the Swiss franc and a 27-year low against the Australian dollar, a result of expectations that the U.S. Federal Reserve might print more money to help save the anemic U.S. economy.

Today’s USD strength also caused a slide in commodities; oil fell from a five-month high and copper and gold halted their recent rallies with gold putting in its biggest one-day move lower in a month.

The Dow lost 19.07 points, or 0.17 percent, the S&P 500 lost 1.91 points, or 0.16 percent, and the Nasdaq gained 3.01 points, or 0.13 percent.