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:

  • S&P cuts Greece’s rating by two levels and put on negative watch.
  • EUR/USD sold aggressively on the downgrade news as sovereign debt issues and default concerns increase.
  • AUD stays supported as the market awaits Trade Balance figures and Unemployment later this week.
  • Commodities continue to recover last week’s losses as investors see last week as the clean-out to initiate new longs and take a run at the highs again.
  • US equity markets started the week with steady gains with the Dow gaining 0.36%, S&P500 up 0.45% and Nasdaq up 0.55%.

AUD/USD
AUD continued to grind higher as strong ANZ job ads helped the cause for imminent rate rises in the coming months and ANZ calls for 100bps in increases over the next 18 months. From here traders are happy buying dips so long as we stay above 1.0740. A break of this level is critical and could be quite bearish. A break of 1.0810/20 is quite bullish.

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XAU/USD
Gold broke higher and has since consolidated above there. Although the short-term trend is up at the moment and the sentiment is bullish, traders are exercising caution as the pattern could be a bear flag and break downside, but so long as we stay above 1500 from here traders are happy to stay long.

EUR/USD
EUR/USD continued lower as the S&P downgrade saw traders shy away from the perceived risk associated with the Eurozone. While rumours of possible breakaway by Greece and also downward revisions continue, traders seem content to continue selling looking to test 1.4200 later this week. Only a break back up through 1.4400 could change their sentiment.

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GBP/USD
GBP broke lower initially as the UK was not immune to the overall negative sentiment towards the Eurozone. A break of critical support around 1.6350 also saw stop loss selling push it below 1.6300 briefly. Trader’s sentiment is firmly on the bearish side while this continues as happy to sell any rally unless we break up through 1.6420/30 region.

USD/JPY
USD/JPY yet again confirmed the downtrend as the rally was sold aggressively and trader are still happy selling any rally back towards 81.00. Only a break back up through 81.20/30 region could change their minds at the moment and the call of 79.50 is where they are targeting in the first instance.

AUD/JPY
AUD/JPY rejected again from the 87.00 level and traders are now happy staying short so long as we stay below there. Break traders are poised on a break topside which could be a bullish signal but the overall sentiment for the time being is to seel the rally looking for it to re-test 84.50 lows in the coming sessions

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OIL
Oil again proved extremely volatile with plenty of opportunity to trade both sides. 100.00 is now seen by traders as an important level and they are happy buying so long as this level holds, but a break of there could see it quickly down to the previous lows of 95.50. Sellers rumoured to be around above 104.00 through to 106.00 in the short term.

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