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:

  • Friday’s extremely poor US jobs numbers hit confidence, greenback
  • Euro hits four-week highs against greenback as Greek debt crisis concerns ease
  • AUD/USD trades higher, close to 1.0800, after US jobs numbers
  • Commodities generally higher on USD weakness
  • In equity markets, the FTSE closed up 0.1%, while Dow was down 0.8%, the S&P 500 fell 1.0%, while the Nasdaq dropped 1.5%
  • Looking ahead to the week, we have rate decisions in the Eurozone, the UK, Australia and New Zealand as well as employment data from Canada and Australia

AUD/USD
The AUD/USD benefited from the USD weakness on Friday pushing back to three-week highs at 1.0780. While the AUD is very close to resistance, the overall picture is seen by the market as more bullish. Traders will be looking for a break of 1.0780 in order to initiate new longs.

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XAU/USD
Gold is in a similar position to the AUD/USD. While the market is looking technically strong, it is close to key resistance and we might see gold trade in a congested fashion in the near term. Analysts believe gold might need some kind of fundamental trigger to push above 1551 and then all-time highs at 1578. Support is seen above 1520.

EUR/USD
The Euro was pushed higher towards the end of last week as it benefited from the improving likelihood of a Greek bailout and the weakening US dollar. After the strong gains last week, a pause might be warranted, but any further news on the Greek situation will continue to drive sentiment. A pullback to 1.4400/50 will be seen as buyable by traders.

GBP/USD
The GBP/USD found support once again at the 1.6300 level on Friday and has since bounce back to the middle of its recent
trading range. From here, the market is expecting the pair to move back to the upper side of the consolidation pattern at
1.6550. Traders will be looking to play the range in the near term

USD/JPY
The USD/JPY continued to head lower on Friday until it found some buying support just above 80.00. The “round number effect” at 80.00 has provided good support in recent times and more aggressive traders will look to initiate longs at that level. Any move back to 80.70 will be seen as an opportunity to take new shorts.

AUD/JPY
AUD/JPY has now broken out of its broad triangle formation on two occasions, each time in opposite directions. Clearly, the market has no confidence in this pair for the moment, and it remains trapped in a tight range between 85.70 and 86.70. Overall, the momentum slightly favours the bulls and traders might consider taking longs at lower prices.

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OIL
Oil appears to be drifting lower as part of a larger consolation pattern produced over the last couple of months. USD weakness has been the most recent price driver with Friday’s falls in the greenback seeing oil push back above US$100 per barrel. The market sees resistance at 101.

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Forex Market Insight 06 June 2011

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