Trading Setups / Chart in Focus:
The AUDUSD has been trading in a large range between about 1.0610 and 1.0175 area for over two months now. We can see that today the market has found support at the bottom of the range, showing some rejection of this key level. If you look at the 4 hour time frame (second chart below), you can see a pin bar reversal setup has formed showing clear rejection of the key trading range support level. The pin bar has already come off a little bit to the upside, but if the market remains buoyant in the next 24 hours we could see a larger move higher back into the body of this trading range. Alternatively, a break below the trading range support would clearly be a bearish event and probably lead to a larger move lower.
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In the currency markets, the euro shot higher today on the back of positive news about the euro-zone debt crisis from the ECB. The EURUSD moved to two-week highs 1.3030.
The Japanese yen was mostly lower against the other majors today on the back of speculation that the Bank of Japan might ease monetary policy again soon.
The U.S. dollar lost ground across the board today.
In the U.S. markets today, stocks moved higher on the back of a positive report about the labor market as well as better sales from retail stores.
The Dow added 80.75 points, the S&P 500 gained 10.41 points, and the Nasdaq added 14.23 points.
Upcoming important economic announcements (New York time): 10/05/2012
Tentative: Japan – BOJ Press Conference
3:00am EST: Switzerland – Foreign Currency Reserves
8:30am EST: Canada – Building Permits m/m
8:30am EST: Canada – Employment Change
8:30am EST: Canada – Unemployment Rate
8:30am EST: United States – Non-Farm Employment Change
8:30am EST: United States – Unemployment Rate