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Forex Price Action – Euro Forms Combo Pin Bar + Inside Bar | Sept. 4th
After the false break from last week, the EURUSD has now over the last two days formed an inside bar, with today forming a companion pin bar. What is interesting about this is how the last two bars are inside the large bar from Friday, but also mostly contained in the rejection area of Friday’s price action.
This is really tricky as now it has today close below the major highs from last week, suggesting downside pressure will likely continue short term. But from a daily chart, there may be some bulls who take this opportunity to form a higher low and squeeze the bears out.
Although I favor the former scenario, the latter is possible but we’ll likely see more consolidation till the ECB meeting this Thursday. Short term, bears can sell just near the days highs with stops just above 1.2650 targeting 1.2565 for good R:R. Bulls will meanwhile want to wait for a breakout above the 1.2650 are before adding longs, or wait for a corrective pullback towards 1.2500 before stepping in.
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Global Market Commentary:
While markets sold off in Europe over concerns about a potential ECB bond buying program, US manufacturing data fell to its largest loss in more than 3yrs suggesting a weak US recovery as the ISM fell below the 50 level suggesting contraction.
Euro longs were pared as traders await the ECB rate decision this Thursday to see if more monetary easing is in the pipeline.
Volumes were thin, but Gold climbed mildly to $1696 on the day while the big loser on the day was the AUDUSD which sold off about 60pips to 1.0221 making new lows for the last 30 days.
Upcoming Economic Announcements:
|AUD AiG Performance of Service Index||23.30GMT||19.30EST|
|AUD Gross Domestic Product (YoY)||01.30GMT||21.30EST|
|CNY HSBC Services PMI||02.30GMT||22.30EST|
|EUR German Purchasing Manager Index Services||07.55GMT||03.55EST|
|GBP Purchasing Manager Index Services||08.30GMT||04.30EST|
|EUR Euro-Zone Retail Sales (YoY)||09.00GMT||05.00EST|
|CAD Bank of Canada Rate Decision||13.00GMT||09.00EST|
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