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:

  • US bond yields rise as Republicans and Democrats offer competing plans to resolve debt crisis
  • USD decline continues, most notably against CHF and JPY
  • EUR, GBP steady as Greece sees further downgrades
  • AUD rises to two-month high on greenback weakness
  • Dow loses 0.7% as markets focus on potential US default
  • Looking forward, Obama speech at 11.00am will be crucial, RBA speech and UK GDP also important

AUD/USD
The Aussie pulled back to support at 1.0800 before using that level to push higher. The push upward found resistance at
1.0870 after making new two-month highs. Technically, the picture looks upbeat for the Aussie, with traders looking to take
new longs on a pullback to 1.0800 or a break above 1.0870.

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XAU/USD
No real change for gold after breaking above 1610 on yesterday’s open. The precious metal has consolidated between 1610 and 1625 over the last 24 hours with short-term direction driven by the US dollar. From here, traders will be waiting for a break higher to take new longs, while any pullback to 1610 will also be seen as buyable.

EUR/USD
With both the Eurozone and the US struggling with debt issues, we’ve seen very little action on this pair over the last 24 hours as traders try and figure out which area will end with the biggest bang. The Euro remains capped by the 1.4400/50 area and traders will continue to use this area to take new shorts, with profit targets seen first at 1.4330 and then 1.4280.

GBP/USD
Like the Euro, the GBP/USD saw an extremely quite 24 hours as it consolidated its recent move higher. From a technical perspective, traders should be looking for longs, especially on any break above 1.6350, but tonight’s GBP numbers, at 6.30pm, could bring yet more disappointment for the UK.

USD/JPY
Traders continue to send the USD/JPY lower and this pair, along with the USD/CHF, remains one of the favoured ways to gain exposure to the US debt problems. As the pair grinds lower, resistance has move down to 78.40/50 with support now seen at 78.10. As always, keep your eyes peeled at these low levels for any signs of BoJ intervention.

SILVER
Silver has pushed higher in line with gold’s gains. Traders will be looking to take new longs on a move above 41.10 or on any pullback to 39.60 (at the lower end of the triangle formation).

USD/CHF
The USD/CHF broke below major support at 80.80 over the last 24 hours and this sets up the pair for further losses. The next level of support is seen at 80.25. News flow from the US debt negotiations will be crucial on this pair.
GBP/JPY
The GBP/JPY rejected higher levels and is now heading back to the lower end of the range. Traders are likely to use any move back to 128.20 as an opportunity to take new shorts.
AUD/JPY
The AUD/JPY remains trapped in its trading range, but the technical picture is looking increasingly bullish thanks to the ascending triangle formation. Therefore, the market is likely to look at any break above 85.20 as bullish. Until then, traders
will be working to short side on any move up to 85.20.

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OIL
Crude continues to trade within an ascending triangle formation and therefore any break above 100 will be seen as bullish.
Traders will also be looking at any move back to 98.60 as a buying opportunity.
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