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:

  • Bank of England leaves rates unchanged at 0.50%
  • ECB leaves rates unchanged at 1.25%
  • Staying “strongly vigilant” Trichet encourages July hawks
  • AUD drops early yesterday after poor jobs numbers
  • US trade data boosts equity markets Dow up 0.63% and S&P up 0.74%
  • Gold and Oil finish higher as ECB warns of second half inflation.

AUD/USD
The AUD lost ground after yesterday’s employment numbers came in well below expectations. However, after an initial reaction lower, the AUD found support at 1.0560. For now, while 1.0560 holds, the market will stay cautiously bullish, but a break below support at 1.0560/600 will be bearish.

XAU/USD
Gold remains in its upward sloping triangle formation, a traditionally bullish pattern, but it’s currently hovering right at the bottom of the formation. The market has a slight bullish bias while gold remains in the pattern with a break above 1555 most bullish. A break below 1532 could see a move back to 1520.

EUR/USD
The EUR was steady after the ECB’s rate decision last night, but the post-meeting press conference saw some heavy selling with ECB governor Trichet clearly not as hawkish as the market had expected. This might see some follow through selling in the Asian session, with any retracement back to 1.4570 seen as sellable. Support seen at 1.4450.

GBP/USD
The BoE’s decision to keep rates steady had little impact overnight, with the GBPUSD continuing to trade within this recent consolidation pattern. Traders are continuing to take positions in line with the range, with support seen at 1.6350 and resistance seen at 1.6450.

USD/JPY
No real change on the USDJPY as it continues to find support at key lows around 79.60 and resistance is seen at 80.50/60. Like gold, this pair is driven by sentiment toward the USD, and a break on both instruments is likely to need some kind of fundamental trigger. Traders will be eagerly waiting a break below 79.60.

AUD/JPY
The AUDJPY bounced from support overnight before rolling over just below resistance at 85.80. This now sets up another move lower, most likely back to support at 84.30. As a major ‘risk’ currency, the AUDJPY is closely tied to the performance of equity markets, so keep a close eye on share markets and other risk currencies for an indication of future direction.


OIL
Crude has moved back to the top of the range and now seems most likely to head back to the lower end at 100. The fact that oil was unable to hold above 102 is also bearish in the near term. Any news from OPEC will drive prices in the near term so be aware there is risk of volatility in either direction.
To have it delivered on your inbox daily hot off the press, subscribe to the Market Insight Report here.

Forex Market Insight 10 June 2011

Get Free Forex Training Materials from our Forex Education section.