The Forex Market Insight Report shows charts on different major currencies and commodities, with brief commentaries on how new data releases and news cause movements in the market.

Headline:

  • Risk continues higher as Greek optimism washes through markets
  • US employment numbers slightly below expectations, but Chicago PMI surprises to the upside
  • AUD, EUR both pause at higher levels
  • Crude, gold both steady overnight
  • Dow gains strongly for fourth day to close 1.2% higher
  • Tonight’s agenda sees EU employment at 7.00pm and US ISM manufacturing at 12.00am

AUD/USD
The Aussie’s monster move higher has been capped just below resistance at 1.0760/80 and from here there is the expectation in the market that we will see a pullback to support before the next step higher. Support currently seen at 1.0600/50.

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XAU/USD
Gold continues to trade in the range with support at 1490 and resistance at 1510. Traders are likely to continue to play the range in the near term, but with the strong move lower over the last ten days, the expectation is that a break lower has the potential to see further selling.

EUR/USD
The Euro has found resistance up at 1.4530, which marks the top end of the symmetrical triangle. From here, the market will be looking for a move back to the lower end of the range, back at 1.4130, over the next few days. A clear break of 1.4530 changes the picture to bullish, however.

GBP/USD
The pound has been hit by heavy selling over the last two weeks as expectations of rate rises have been wound back. For the moment, the GBP/USD appears capped at 1.6100, and we’ve seen the pair pull back from these levels. Support is seen at 1.5920 and a break below this could trigger further selling in the market, with targets back to 1.5850.

USD/JPY
The USD strength that has characterised the forex markets over the last week-and-a-half has been eroded over the last 48 hours and this is clearly visible on the USD/JPY charts. The pair has become more volatile in recent days and this adds to the uncertainty. For now, however, the market will continue to favour the bulls, with traders likely to buy around 80.30/40 with
SILVER
Silver‘s gains have been capped at 35.00 over the last 48 hours and, with gold also unable to make a clear push higher, the market looks to be bearish on the precious metals space. This sets up another move back to 33.30.
USD/CHF
The USD/CHF has wrong-footed the market after breaking below support but then bouncing back into the trading range. This false break is a bullish signal and traders are now looking for the pair to move back to the top of the range at 85.50.
GBP/JPY
The GBP/JPY continues to trade in the short-term trading range with resistance at 130.00 and support at 128.10. Any move back to 130.00 is likely to be seen as sellable while a break below 128.10 will also see the sellers emerge.
AUD/JPY
The Aussie-yen found resistance at 86.50 and this sets up a move back to re-test support at 85.50. Traders will be looking to take new longs on any move back to support at 85.50. The recent break above the descending triangle is very bullish and traders will be looking to participate in a multi-month move higher.

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OIL
Oil has traded perfectly over the last 24 hours with support and resistance defining trade in a horizontal band. For now, the market will expect this range to hold, but a break in either direction is also tradable.

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Forex Market Insight 01 July 2011

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