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 rallies after US government nears deal on debt
  • Strong US data and corporate earnings also boosts optimism
  • Risk currencies like AUD and EUR push higher, but resistance caps gains
  • Gold eases lower, dropping US$15, as US debt crisis nears resolution
  • Global equities markets see strong gains, with Dow up 1.6% overnight
  • Locally, MI leading index due at 10.30am, with UK MPC minutes at 6.30pm

AUD/USD
The Aussie pushed strongly higher overnight as risk currencies rallied thanks to a potential agreement on the US debt ceiling. The overnight move has brought the AUDUSD back toward key resistance at 1.0800 and traders will now be looking for shorts until 1.0800 breaks. A break of 1.0800 will be seen as bullish with the potential to ride up to 1.1000.

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XAU/USD
Gold pulled back sharply over the last 24 hours as the US government’s move toward agreement on the debt ceiling caused some of the flight-to-safety trade to be unwound. Traders will now be waiting for a move back to support at 1575 in order to build new longs.

EUR/USD
The Euro’s move higher was capped at resistance at 1.4200 and we have since seen a move lower from those levels. Traders are likely to continue to ride the move back lower with targets back to 1.4000.

GBP/USD
The pound currently looks well contained in its trading range with support seen at 1.6000 and resistance at 1.6200.
Overnight, pound moved up to the top of the range and traders will now be looking to take new short positions in expectation
of a move back to the lower end of the range.

USD/JPY
The dollar-yen has seen some strength overnight thanks to the increasing likelihood of an agreement on the US debt ceiling. However, the market is unlikely to become bullish until we see a clear break of 79.60 and, as such, the focus will remain on taking new shorts at higher levels.

SILVER
Like gold, silver eased back as some of the US debt concerns eased, but traders will be looking to take new long on any pull back to support at 39.50.

USD/CHF
The USD/CHF made a push up to 82.00 overnight and this is likely to see traders build new short positions on this pair.
Traders will be looking to ride the move back to 80.80, with a break of 80.80 also seen as bearish.

GBP/JPY
The GBP/JPY has produced quite a bearish signal overnight with the pair clearly rejecting the weekly highs. From here, traders will be looking for a move first to 126.70 and then back to the key lows at 125.30.

AUD/JPY
The AUD/JPY has moved right up to resistance overnight and while the move was strong, this will see traders looking to takenew shorts on the pair. A clear break of 84.20, however, will change the market’s view to bullish.

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OIL
Crude oil now appears to be forming a symmetrical triangle formation. This is usually seen as a continuation pattern and as such traders will be looking for a break higher to confirm the pattern. Until we see this break, however, traders will be
looking to take shorts around 98.50.

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