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 equity markets lead overnight bounce after better than expected jobs and home sales data
  • Risk currencies push back higher as short-term sentiment improves
  • USD weakens as US Treasury yields hit 2011 low on Greek debt fears
  • Aussie gains overnight after false break below 1.0520
  • Commodities creep higher but gains hampered by resistance
  • Equities saw late gains. While the FSTE was down 0.7%, the Dow gained 0.5%, but the Nasdaq lost 0.3%

AUD/USD
The AUD continues to trade in rangebound fashion with the RBA’s belligerent posturing earlier in the week providing some support despite the selldown in equity markets. That said, the Aussie is clearly stuck between support around 1.0480 and resistance below 1.0700 and traders are likely to play the range in the near term.

XAU/USD
Gold is trading in a similar fashion to the Aussie with the precious metal stuck in a tight trading range. On gold, we can see it is an upward sloping flag pattern with support at 1520 and resistance 1540. This pattern is usually seen as bearish and a break of 1520 could see sellers emerge.

EUR/USD
The Euro was helped higher overnight after the IMF and EU produced an in principle agreement on Greece. This, in combination with the better US data, saw buyers move into the Euro. However, general tone of the market remains bearish, and traders will be looking for new shorts at resistance between 1.4220 and 1.4270.

GBP/USD
GBPUSD looks to be trapped underneath the downward sloping flag pattern following its break below this pattern two days ago. Last night’s retail sales numbers were also bearish. From here, the bottom end of the pattern should provide resistance and traders will be looking to sell any retracement back to this level, at 1.6280, in the expectation of a move back to 1.6180
USD/JPY
USD/JPY was sent lower overnight as an improvement in risk appetite caused the greenback to weaken. The dollar-yen is now at important support, but for the moment, the market is likely to expect the USDJPY to continue higher unless we see a break below 80.50.

SILVER
Silver is trading in line with the AUD and gold in that it remains stuck in consolidation after some recent steps lower. Any move up to 36.00 is seen as sellable with initial targets back to 35.20 and then 34.40.

USD/CHF
The Swiss Franc reversed from the resistance levels identified in yesterday’s report, and it would appear the sellers will remain in control while the USD/CHF trades below 85.50. The USD/CHF has been stuck in an extremely strong downtrend for many years and taking new positions in line with the dominant trend remains the best option.
GBP/JPY
The GBP/JPY failed to push higher yesterday and instead actually broke below 130.00 after UK retail sales came in well below expectations. This news suggests that a UK rate rise is still some time away. Traders are now eyeing 129.20 and any break below this level of support will see traders taking new shorts.

AUD/JPY
The AUD/JPY continues to trade perfectly in line with expectations and has now pushed back to the lower end of the trading range. Traders will be looking to buy lows around 84.50 and sell highs at 86.30. A break of 84.50 is also seen as a selling opportunity.

OIL
Oil wasn’t able to make it up to resistance at 96.20 overnight, instead falling short and reversing from 95.70. Market sentiment remains clearly bearish on crude with the best selling opportunities seen on a retracement higher back to 96.20 or on a break below 94.00.

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