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.

Headlines:

  • Issues with Japan’s nuclear reactor have caused global growth concerns and commodity prices took the brunt of selling on the perceived lack of future demand.
  • USD/CHF lower as investors flock to the CHF on the safety play as the nuclear crisis in Japan is reported to be as bad if not worse than Chernobyl
  • AUD/USD breaks down on the back of aggressive AUD/JPY selling and breaching of major uptrend support.
  • Oil loses ground for the second day running on demand concerns as higher prices are perceived to be slowing world economic growth
  • UK inflation report puts impending rate rises on the back burner for now.

AUD/USD
As mentioned in yesterday’s report there was concern of a breakdown in the AUD and it eventuated in the most aggressive way possible as AUD/JPY also broke down. The important thing to note is the re-test of the 1.0500 breakout where it rejected and has now kept traders content to be short or sell rallies unless we break back up through there.

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XAU/USD
Gold tried initially to shrug off the past few sessions of negativity but the buyers quickly run out of interest as the effect of high commodity prices on worldwide growth saw demand disappear from the market. It was quickly down to the support of just under 1448.00. Traders now seemingly to prefer the long side inside the range, being wary of a break of 1445.00.

EUR/USD
The uptrend continued again yesterday in the EUR as traders were patient and got long at great levels. Buying of CHF on the safety play also helped the EUR, but is seems as though the trend continues to be the friend of traders until it eventually turns. Support now comes in around1.4400 and buyers are looking for these levels to get long, a break of there is quite bearish.

GBP/USD
A lower than expected UK inflation report (3.2% Vs 4.4%exp) saw GBP sold aggressively as it now seems that the almost certain rate rise next month has been put on the back-burner for the time being. Traders are cautious of getting too short down here and preferring to sell the rally back toward 1.6300 looking for an eventual break of 1.6230 support.

USD/JPY
USD/JPY was under extreme pressure yesterday after the breakdown from 84.50 and we were quickly to the lows as AUD/JPY was the catalyst for seeing USD/JPY hit hard. As with the AUD, there was a bounce back to the breakdown point which rejected and confirmed traders are more comfortable being short here and looking to sell any rally for the time being

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AUD/JPY
The uptrend broke significantly yesterday and the market is now firmly in the grip of the bears with a rally back towards the breakout struggling to get above 88.50 before the sellers emerged. Sentiment is to continue lower unless we get back through this level and traders are calling for 86.00 in the coming sessions with bears wary of support at 87.00 initially.

OIL
Oil continued to be out of favour last night as traders sold on concerns that such high levels of commodity prices will be detrimental to the world economic recovery and the demand for oil will be lower as a result. Initially the sentiment is the range of 105.50/106.5 will hold for Asia, but selling pressure looks like continuing from here.

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