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 instruments continue higher as Dow has third-best winning week since 2009
  • AUD/USD pushes into major resistance at 1.0400
  • Euro eases lower as market waits outcome of weekend meeting of EU finance ministers
  • Heavy selling pressures on South African rand as the country‟s bond prices tumble
  • Gold stages bounce in line with Euro‟s fall as default worries return
  • Quiet start to the week, but two-day Fed meeting on Wed and Thurs the week‟s major events

AUD/USD
The improvement in risk appetite has seen the Aussie march up into resistance at 1.0400 and this will be a major defining level for the week ahead. A break above 1.0400 will change the short-term mood to bullish and is likely to trigger new longs.

GOLD
Gold continues lower to 1760 on Friday until a resurgence of European debt concerns saw a sharp spike higher. The move higher was terminated at the downtrend resistance line and the bears will be looking at this area as an opportunity for new shorts. A break of 1810 could signal the bulls are back in control.

EUR/USD
The EUR/USD hasn‟t been able to hold onto the gains we saw in the aftermath of the ECCB‟s move to pump liquidity into the system and traders are likely to remain focused on the downside until we see a break above 1.3970. A break of 1.3780 is a short-term trigger for new shorts.

GBP/USD
The GBP/USD remains trapped in the trading range between 1.5700 and 1.5870 in the near term and the market‟s focus is likely to continue to be on the downside. In particular, a break of 1.5700 could be seen as the trigger for new short positions.

USD/JPY
No real change on the USD/JPY but support looks to have drifted up to 76.50 as the pair produces a multi-week "saucer bottom‟ pattern. As per last week, traders will be looking for longs around 76.60 and shorts around 77.50.

SILVER
Like gold, silver has seen a reaction higher thanks to renewed Greek debt fears but, also like gold, the move has pushed silver back into the sell zone. We saw a bit of a negative reaction to higher prices near last week‟s close and this could suggest some weakening in the precious metals space as we head into the new week.

USD/CHF
The dollar-Swiss is clearly consolidating within a descending triangle and this is usually seen as a bearish pattern. A break below 86.40 will confirm the bearish sentiment, but traders could reamin wary of this pair after the SNB‟s recent move to depreciate the franc.

GBP/JPY
Traders continue to use any move higher as an opportunity to get short on the GBP/JPY with moves up towards 122.00 seen as providing the best value. As we discussed last week, a break below 120.70 could trigger a move to the all-time lows at 119.20.

AUD/JPY
The AUD/JPY is in a similar position to the AUD/USD. The pair is trading below a crucial area of resistance, in this case at 80.00. A move above 80.00 will change the market‟s view to bullish in the near term and could be seen as a buying opportunity.

OIL
Crude remains the best behaving instrument in the report‟s coverage with every move up to 90 quickly sold lower over the
last two weeks. While this won‟t last forever, in the near term, traders are likely to stick with the old adage “if it ain‟t broke,
don‟t fix it‟ and continue to use moves into resistance as the trigger for new shorts.

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