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:

  • Investors continue to favour risk after Jackson Hole speech, Hurricane Irene not as bad as fearedDow jumps 255 points with financials, industrials driving the gains
  • Risk currencies improve: AUD/USD, EUR/USD both break above key resistance
  • USD strengthens against reserve currencies; USD/CHF gains substantially
  • Gold, silver both lower as fear bets unwind; crude pushed higher
  • The focus tonight will be on the US, with Consumer Confidence and FOMC minutes tonight

AUD/USD
The AUD/USD has gained around 80 pips after breaking above resistance at 1.0600 in yesterday’s session, but it’s now run into another layer of resistance at 1.0680. We can expect more congested trade until we break above 1.0800. Traders will continue to favour the long side with a pullback toward 1.0600 seen as a chance to take new longs.

XAU/USD
Gold was sent sharply lower overnight in a sign of the massive volatility that has been seen in this market over the last week. The line in the sand is now 1775 and a break below this level sets up a move back to 1750. Over the medium term, a break of 1680 will complete a head-and-shoulders pattern that will turn the picture sharply bearish.

EUR/USD
The Euro has broken above 1.4500 is a positive sign for risk instruments, but pushing higher will a hard task with considerable resistance between 1.4550 and 1.4600. A clear break above 1.4600 can target 1.4700.

GBP/USD
The GBP/USD continues to be delicately balanced with the short-term trend suggesting a move higher, but the rejection of 1.6400/50 presents a more bearish tone. Any move back to 1.6320 could be seen as a chance for a short-term push higher, but bulls will be waiting for a move above 1.6450 before taking new longs.

USD/JPY
The USD/JPY has continued to provide opportunities on the downside for traders as it finds resistance at 77.00/20 and traders will continue to work these levels for new short trades. The USD has recently shown some strength against reserve currencies so traders will be likely to stop-and-reverse on a clear break of 77.20.

SILVER
Silver remains in the trading range and the market will be looking to work the range in the near term. A move back to 40.10 can be seen as buyable, but a clear break below 40.00 will be seen as bearish.

USD/CHF
The dollar-Swiss has now pushed up to 82.00 and rejected levels above this layer of resistance and this is suggestive of a short-term pullback. However traders will be looking for new opportunities to get long especially on a move back towards 80.00.

GBP/JPY
The GBP/JPY continues to find resistance at 127.00 and any move back to that level is likely to be seen as a selling opportunity.

AUD/JPY
The AUD/JPY gained around 100 pips after breaking above resistance at 81.20 and traders are likely to remain focused on the long side for the time being. Any pullback is a chance to get long with the next level of resistance seen at 83.10.

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OIL
Oil looks bullish now that it has broken out of the ascending triangle. From here, traders will expect a move toward 88.50, with any pull back to 86.35 seen as a new opportunity for longs.

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