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:

  • Fed’s Rosengren commented that job growth is too slow to remove the stimulus at this stage as early release employment data pointed to a lower than expected number in tomorrow night’s NFP release.
  • EUR stays supported as traders eagerly await tonight’s ECB decision.
  • AUD struggles to maintain initial rally as risk assets are sold.
  • Commodity markets hit hard as increased margin requirements force traders to close long trades.
  • Oil sold aggressively as data shows an increase in supplies signaling instability in US economic growth.
  • US equity markets dropped on poor economic data with the Dow falling 0.70%, S&P500 down 0.70% and Nasdaq down 0.47%

AUD/USD
The Aussie made an early attempt to push higher overnight before the bears regained control and pushed the AUD down by more than 100 pips. The selldown we have seen this week could be nearing its conclusion, however, with traders looking for a bounce near 1.0680/700. If the bounce does occur, traders will be looking to take profits sooner rather than later.

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XAU/USD
Gold continues to be weathered by the shift in sentiment that has caused precious metals to tank this week. Silver is now down more than 20% from its peak while gold has also lost ground. For now, the precious metals space appears to be controlled by the sellers and traders will be looking to sell any move back to the underside of the upside channel at 1530/5.

EUR/USD
The Euro popped its head above the upper side of the horizontal pattern overnight but was unable to sustain the move. From here, the market assumes the most likely outcome will be for the Euro to head back to the lower end of the channel, at 1.4760/70, before making another attempt higher. Don’t forget the ECB have an interest rate decision at 9.45pm AEST.

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GBP/USD
The GBP/USD remains in the broad trading band between 1.6430/40 and 1.6600/10 and the market has no clear bias for the moment. Tonight’s BoE interest rate decision, at 9.00pm AEST, will be a clear driver of future price action. A clear break of 1.6430/40 may shift the tone to bearish

USD/JPY
The USD/JPY continues to drift lower with the potential to move back into the sub-80 trading zone seen after the Sendai earthquake. Traders will be carefully watching how the 80 level holds if the market returns to that level. In the meantime traders will be looking for a counter-trend rally in order to take new shorts, with a move back to 81.00/10 seen as sellable.

AUD/JPY
The AUD/JPY is approaching a crucial level at 86.00/20 with the potential for the market to turn even more bearish on a break below that level. With risk generally coming off the table, this is reflected in the selldown on the AUD//JPY, and traders will be focusing on the short side in the near term. Any rally to 87.20/40, or a break below 86.00, is likely to see further selling.

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OIL
Oil plunged lower overnight after US oil inventories came in above expectations. This increase in supply is naturally bearish for oil. This move saw a clear break of the trend line and sets up oil for further losses. A move back to 106.00 could be seen as maintaining the integrity of the long-term uptrend, but a break below that would be seen by traders as resolutely bearish.

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