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  1. Here is a simple shortcode that gets the job done:

    add_shortcode('ajax_login','ajaxlogin_shortcode_handler');
function ajaxlogin_shortcode_handler($atts,$content=null){
    if (is_user_logged_in())
        return;

    $retval = '<p id="message" style="color:red"></p>'
            .wp_login_form(array('form_id' => 'ajaxloginform','echo' => false)).
            '<div id="login-result" style="position:absolute; top:300px; left: 670px;">
                <img src="path/ajax-loader.gif"/>
            </div>';

    $js = <<<JS
<script type="text/javascript">
    jQuery(document).ready(function($){
        $("#ajaxloginform").click(function() {
            // turn loading screen on
            $('#login-result').toggle();
            //get foem data
            var input_data = $('#my-login-form').serialize();
            //make ajax call
            $.ajax({
                type: "POST",
                url: "<?php echo site_url('wp-login.php','login_post'); ?>",
                data: input_data,
                success: function(msg) {
                    // if login incorrect, wordpress will redirect user to its own login form. We scan for an error term.
                    var reg1 = /login_error/g;
                    if (reg1.test(msg)) {
                        $('#message').html("<?php _e('Your login credentials is not correct. Please try again.'); ?>");
                    }else {
                        // login success. redirect users to some page.
                        //$(location).attr('href', '/my-account/');
                        //or reload the same page
                        location.reload();
                    }
                }
            });
            // turn loading screen off
            $('#login-result').toggle();
            // prevent actual submission of form
            return false;
        });
    });
</script>
JS;
    //enqueue jquery if its not already loaded
    wp_enqueue_script('jquery');
    return $retval .$js;
}

    Usage:

    [ajax_login]