Forex Market Insight 06/07/2011
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:
- RBA kicks things off with the central bank widely expected to hold rates at 4.75%.
- Yen is near a month high as slowing growth boost demand for safety from the uncertain greenback.
- Oil dropped for a third day in New York speculation that OPEC may increase output when it meets tomorrow.
- Gold dropped last night after seeing gains after Friday’s U.S. jobs report
- Equity markets started the week off with the Dow down 0.50%, S&P down 1.08% and Nasdaq down 1.11%, the Nikkei is up 0.21%
AUD/USD
No real change for the AUD/USD with the pair remaining trapped in the trading range, with support seen at 1.0600 and resistance at 1.0780. All eyes are on today's RBA rate decision, due at 2.30pm AEST, with the majority of the market believing there will be no change. However, this means there is clearly upside risk, and any surprise move or change in tone could see the Aussie surge upwards.
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XAU/USD
Gold pushed above resistance overnight but was unable to hold those new highs. As we have discussed, with gold so close to all-time highs, we are likely to see some selling and congested trade around these levels. However, the overall picture looks bullish, and traders will be looking to build new longs around 1525/30.
EUR/USD
The Euro eased lower over the last 24 hours after seeing very strong gains at the end of the last week. We would not be surprised to see this weakness continue, with the market looking for a move back to support at 1.4400/50 before taking new longs.
GBP/USD
Like the EUR, we've seen the GBPUSD also ease back, heading back to support at 1.6300. The most recent price action suggests a weakening of the bullish tone, and traders will be watching the 1.6300 level carefully. Any break below 1.6300 could see a rapid move to 1.6100.
USD/JPY
The dollar-yen's falls have been halted at major support at 80.00 but we have seen very little signs of a bounce from this level. Traders are watching the 80.00 level very carefully in the expectation that a break below this level will see heavy selling. First support below this level is seen at 79.60.
AUD/JPY
Still nothing happening on this pair as it continues to consolidate after its massive moves in March. The market is still expecting an upside break on this pair but it has been extremely slow going. A break of 85.00 would be seen as bearish.
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OIL
Crude continued to be hit as markets worried about the future prospects for economic growth. Crude has now headed back to
support at 98.00/20 and any break below this will be seen as bearish.
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Forex Market Insight 07 June 2011
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