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:

  • Portugal agrees to US116bn bailout package from the EU to give them more time to reduce their budget deficit.
  • EUR rallies on Portugal news and stronger Producer inflation figures as traders continue to factor in a rate rise in the near future.
  • AUD breaks below 1.0900 as RBA keeps rates on hold and AUD crosses get sold aggressively.
  • Commodity markets continue to be volatile in wide ranges as the fallout from increasing margins continues.
  • US equity markets closed with mixed results down with the Dow flat, S&P500 down 0.34% and Nasdaq down 0.78%

AUD/USD
With the RBA sitting on the sidelines for the moment, the break through 1.0890 provided the bearish signal that trader’s
have been waiting for and for the first time on months a sell the rally sentiment has entered the market (at least in the short
term) as traders are now seeing solid selling of AUD across not only USD, but EUR and JPY keeping AUD heavy.

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XAU/USD
After an extremely volatile past few days Gold continued in this vein and traded in a $25 range again yesterday. Support down around 1520.00 is the level traders are keenly watching and still happy to buy dips down there with most traders believing they will actually get their chance, so are waiting patiently. A break through 1515.00 is a very bearish signal.

EUR/USD
Yet again EUR/USD has been the range trader’s delight and 1.4750-1.4900 contained things again with support on the dip coming from the Portugal bailout acceptance. It looks like continuing for the next 24 hours prior to the rate announcement as traders continue to factor in higher rates but patient traders seem content to wait and get better levels to buy

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GBP/USD
As noted in yesterday’s report the break of 1.6590 produced a significantly bearish signal and on the release of worse than expected UK PMI which poured cold water on possible rate rises tomorrow and traders aggressively sold GBP against both USD & EUR. There seems to be support around 1.6430/40 but sentiment has shifted to sell the rally from here

USD/JPY
USD/JPY continues to grind lower as traders are still happy selling on any rally. We open the Asia session mid-range and although most traders are still calling it lower, those not already short from higher up seem to be waiting for better levels to sell and anywhere back towards 81.80 seems to be their preference.

AUD/JPY
As noted yesterday the 88.30 level was critical and on the break it was quickly lower. A subsequent rally and rejection of the
breakout point has shifted sentiment for the time being to sell the rally on all the AUD crosses as AUD/JPY is the main pair
that traders have attacked in recent days. From here anywhere back towards 88.40/50 is expected to attract sellers.

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OIL
Again the failure to break significantly to the topside has put doubt in the mind of bullish traders and as the Asia session starts we are languishing on the critical support around 110.00/50 region. A break of this level could be extremely bearish and many traders are calling initially to 106.00 and even as low as 102.00 if this level does break.

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