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:

  • US Congress agrees to raise debt ceiling according to media reports
  • Eurzone debt fears dominate weekend news after Fitch downgrades Greece three notches
  • Commodities generally weaker on European debt worries and US growth fears
  • Risk currencies, like the AUDUSD and EURUSD, both lost ground on Friday
  • Friday’s data saw stronger inflation data from Germany, but Canada consumer data disappointed
  • In equity markets, the FTSE closed down 0.1%, while Dow was down 0.7%, the S&P 500 fell 0.8%, while
  • the Nasdaq dropped 0.7%

AUD/USD
The Aussie dollar has been dominated by the short-term downtrend that has been in place since early May and we can see the downtrend line comes into play just above 1.0700. This has confluence with the horizontal resistance also near 1.0700 and traders will be looking to take new shorts around this level. Support is seen near 1.0500.

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XAU/USD
Gold looks to have broken out of the short-term downtrend over the last couple of days and now appears to be setting up for another leg higher. With commodity markets extremely volatile, however, traders are more cautions at the moment. On the top side, resistance is seen at 1526, while support is seen at 1490 to 1500.

EUR/USD
The Euro is looking increasingly sick as the Eurozone debt woes worsen. In recent days, the Euro has been stuck between resistance at 1.4340 and support at 1.4050. Within this zone, we have also seen a bearish edge forming, adding to the downside pressure. A break of 1.4050 will be seen by the market as extremely bearish.

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GBP/USD
The GBP/USD is also trapped in a downtrend with the pair trading in a broad consolidation pattern between 1.6100 and 1.6300. Traders will be waiting for another move back toward 1.6300 before taking new shorts. A break of 1.6100 could also be seen as bearish. Support seen from 1.6100 to 1.6150.

USD/JPY
The USD/JPY could see some selling pressure in the near term after prices rejected higher levels above 82.00. This is typically seen as a bearish sign and is line with the dominant downtrend. A break of the uptrend line at 81.40 would also be seen as bearish. That said, the greenback has recently been stronger, and any break of 82.20 voids the bearish view.

AUD/JPY
The Aussie-yen is currently consolidating, which is typically neutral, but trade has clearly halted near the top of the pattern. From here, the path of least resistance is to the downside, with support seen at 85.30/50. Bear in mind that a break above resistance, at 87.20/40, would shift the market’s focus back on the upside.

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OIL
Oil also presents a picture of consolation with the “black gold” trading in a bearish descending triangle since the sharp falls in early May. Oil is currently trading near the top of the pattern and traders would be looking to take positions in the expectation of a move back to the lower end of the pattern. Ant break of 100 is likely to be seen a bullish.

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