Forex Price Action – Large AUD/USD Engulfing Bar | Sept. 6th

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After selling off 13 of its last 19 days, shedding 450pips in the process, the Aussie erased almost 3 days of losses with a massive bullish engulfing bar. This is the 5th largest open to close bull bar in the last 6 months.  We’ve only had 3 other bullish engulfing bars that opened below the 20ema this year, with two of them being followed by bear days.  If the numbers and 2012 history has its way, today will be a bear close.

Intraday pullbacks to the 1.0250 area could be a good location for short term bulls to take another stab at the 1.03 highs today.  Bears will want to wait till about 1.0330 which is the daily 20ema and July 5th swing high before considering shorts, but there are price action plays for both sides here.

bullish engulfing bar price action sept 6th

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Global Market Commentary:
Global Indices all gained after the ECB bond-buying announcement as Draghi commented how their could be ‘unlimited’ bond buying to stem the EZ debt crisis.

Needless to say, the EURO, every major Index and risk asset took off on the announcement.

The EURUSD closed at 1.2633, the S&P made new yearly highs closing at 1433, along with the CAC 40, the ITA40 & IBEX35 all breaking key resistance levels today.  Gold gained about $9 on the day and has settled around $1700 just after the close.

Upcoming Economic Announcements:

AUD AiG Performance of Construction Index 23.30GMT 19.30EST
AUD Trade Balance (Australian dollar) 01.30GMT 21.30EST
EUR German Trade Balance (euros) 06.00GMT 02.00EST
GBP BoE/GfK Inflation Next 12 Mths 08.30GMT 04.30EST
GBP Producer Price Index Output Core n.s.a. (YoY) 08.30GMT 04.30EST
CAD Unemployment Rate 12.30GMT 08.30EST
USD Change in Non-farm Payrolls 12.30GMT 08.30EST

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