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:

  • Equity futures crunched in early trade, Dow down 200, after S&P downgrades US debt to AA+ over weekend
  • Forex markets see muted reaction to US downgrade, USD/CHF major mover
  • AUD/USD loses around 20 pips in early Monday trading, support at 1.0400 holds
  • Euro and pound both higher in early trading; rumours of upcoming coordinated EBC move
  • Gold surges in first few minutes of trading; nears US$1700 before reversing
  • Central bank intervention remains possibility; eyes on Fed, BoJ, ECB and SNB

AUD/USD
The Aussie has seen some small losses in early morning trade as risk instruments were sharply sold lower. Looking at the daily chart above, we can see the Aussie is at a crucial juncture above 1.0370. A break of 1.0370 sets up further losses, but don’t be surprised if we see a bounce from these levels. Stops under 1.0350 provide good risk/return for aggressive traders.

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XAU/USD
Gold has been bought up in early Monday trading pushing as high as 1695 in early trade. The US downgrade should be bullish for gold and we could see a push above 1700 over the next few days. Support seen at 1682 and then 1640.

EUR/USD
The GBP remains in the overall megaphone pattern with support back at 1.6200 and resistance at 1.6500. After an initial burst of buying, the GBP looks to have started to reverse from the highs and we could expect a move back to 1.6200. However, with the potential for USD weakness, a break above 1.6500 will be seen as bullish.

GBP/USD
The USD/JPY is a candidate for selling today as the negative impact from the US downgrade is likely to translate into USD/JPY weakness. In the near term, a move back to 78.50/60 is seen as sellable with the potential for a move back to 77.80.
USD/JPY
Silver’s really been caught between a rock and a hard place over the last few trading sessions. After falling more than 10% in two sessions, silver has found support around 38.00 and, in addition to the USD weakness following the weekend’s downgrade, this could see the buying come into silver while we hold above 38.00/30.

SILVER
Silver’s really been caught between a rock and a hard place over the last few trading sessions. After falling more than 10% in two sessions, silver has found support around 38.00 and, in addition to the USD weakness following the weekend’s downgrade, this could see the buying come into silver while we hold above 38.00/30.

USD/CHF
The USD/CHF is likely be hit by selling today but the market will need to see a break below 76.00 to take new positions. After last week’s losses in this pair, traders will be focusing on the dollar-Swiss as one of the better ways to take advantage of USD weakness.

GBP/JPY
The GBP/JPY is currently trapped in a range between 128.10 and 129.20 and traders will be looking to favour the short side in the near term. A break 128.20/00 is likely to be seen as a selling opportunity.

AUD/JPY
The AUD/JPY is likely to see selling today as it is highly leveraged to economic confidence. A break of 81.00 could be the trigger for further selling, while any move back to 81.80 is also likely to be seen as sellable.

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OIL
Crude is clearly in the clutches of the bears at the moment and the US downgrade is also a negative for the instrument. From here, support is seen at 83.00 and any break below this level will be seen as bearish. A move to 88.00 will also be closely watched by sellers.
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