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:

  • Obama presented a long term plan to cut $4trln in cumulative deficits within 12 years including ending the bush era tax cuts to the wealthy.
  • USD strengthened against the EUR on the back of positivity surrounding deficit cuts and also German newspapers reporting that restructuring of Greek debt may involve significant losses to 50-70% of investors.
  • Oil held steady and recovered a little ground as US gasoline inventories drop to the lowest level in 12 years.
  • Equity markets closed flat with Dow and S&P500 closing where they started with only the Nasdaq showing gains of 0.61%

AUD/USD
AUD found support on the lows yesterday as support was provided by a resurgence in commodity prices after negative sessions. Traders aren’t convinced however that the selling pressure is over and we seem to be consolidating now in a wide range waiting for the breakout to give the signal of the next direction.

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XAU/USD
Gold traded in a tight range overnight and still seems to be looking for direction. Topside resistance being around 1460.00 has traders content to sell the rally initially but with a tight stop if we break through 1463.00 as this could signal a push back towards 1470.00. 1445.00 still provides a level for the buyers and unless we break out it looks like a range for the moment.

EUR/USD
Concern about Greek debt and positivity surrounding US spending cuts saw the EUR struggle to make any significant move topside and traders have now had their dip to buy into being content getting long around current levels. The uptrend continues, albeit a little weaker and traders seem content to stay long unless 1.4390/00 breaks on the downside.

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GBP/USD
UK employment numbers came out and didn’t have a major impact on the market. We seem to be consolidating with a preference to sell the rally seen amongst traders so long as we stay below 1.6310 in the short term. A break of 1.6230/40 region is what the bears are looking for and calling it to 1.6100 if it happens.

USD/JPY
USD/JPY continues to drift lower although is still giving those patient traders a chance to sell on the rally. 83.50 is now an extremely important level and traders are watching carefully as a break of this level is a significantly bearish signal. It may provide support in the short term, but most traders are anticipating a break lower.

AUD/JPY
We still tend to be treading water in the AUD/JPY which is very common after the break of a major trend. Traders still seem content to be sellers in the rally looking for it to break lower and with USD/JPY also looking heavy, this may keep AUD/JPY struggling in the short term.

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OIL
Oil found a base around 105.50 last night as US petroleum inventories slumped to the lowest level in 12 years showing that as the US economy recovers there should be demand for Crude. This being said, failure to get back through 108.00 is keeping the traders happy to sell around current levels with a stop above 108.50.

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