Forex Price Action Setups (NY Close) Apr. 30th

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Spain Sinking into Recession Hits Markets, Credit Rating Cut Again
Spain having its credit rating slashed for the second time in a matter of weeks and sinking into recession has weighed on the markets today.  Combine this with the weaker then expected US GDP report on Friday and we have dual concerns of the US economy slowing as well.

Keep in mind, the list of shrinking economies in Europe goes like this;
and the Netherlands

This hit indices with the S&P losing the 1400 level and threatening its first monthly decline since Nov. 2011, down 5.45pts or .39% while the DOW shed a modest 14.68pts or .11%.

Keep in mind tomorrow the RBA has its interest rate decision and with the AUD being one of the worst performers against the greenback, the decision could spark some volatility into the pair as traders wait for a possible rate cut.

Gold – Forms Bullish Pin Bar After Intraday Sell-Off
Starting the day rather timid, the shiny metal began a really sharp sell-off from $1662 dropping over $17 in a matter of an hour, only to reverse a lot of those gains very quickly forming a bullish pin bar trading setup on the 4hr time frame.  We have been feeling for a while Gold is starting to form a bottom and the price action has been showing this as it has formed several 4hr pin bars, engulfing bars, and strong rejections to the downside, suggesting the market is happy to buy it on the cheap from any price action dips so the metal seems well supported.  We’d also like to note how the CFTC data on net gold positions is at its lowest since Jan. 20th, 2009 which was the low for gold that year before starting a massive run up from $807 to $1,200 so we could have a short term bottom in place before a possible gold run soon.

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Upcoming Economic Announcements:

EUR German Retail Sales (YoY) 00.00GMT 20.00EST
CNY PMI Manufacturing 01.00GMT 21.00EST
AUD Reserve Bank of Australia Rate Decision 04.30GMT 00.30EST
GBP Purchasing Manager Index Manufacturing 08.30GMT 04.30EST
USD ISM Manufacturing 14.00GMT 10.00EST

Make sure to check out my latest article on Price Action Forex Trading – Engulfing Bar Reversals


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