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:

  • Markets continue to tumble as European debt and US growth fears dominate news wires
  • Key risk currencies, like AUDUSD and EURUSD, both break below key levels
  • Flight to safety sees USD and JPY strengthen
  • Commodities generally weaker as USD gains continue
  • Emerging markets fall the most in close to a year as fear increases
  • In equity markets, the FTSE closed down 1.9%, while Dow was down 1.1%, the S&P 500 fell 0.8%, while the Nasdaq dropped 0.7%

AUD/USD
The Aussie fell sharply last night but found support at 1.0480/500 in what now appears to be a bullish wedge formation. While taking long positions is against the short-term trend, traders expect to see a small counter-trend rally in the near term. Traders will be looking to promptly take profits on any long positions, while a break of 1.0480 will be very bearish.

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XAU/USD
Gold continued higher overnight, bucking the trend of falling commodity markets, and traders again focused on the fear factor gripping the global economy. Traders will be waiting for a break of 1526 to take new longs; however, we might expect gold to consolidate in the near term.

EUR/USD
The Euro was met by heavy selling overnight as European debt woes remain at the forefront of traders’ minds. While the pair found some support around 1.4000, traders believe it is only a matter of time before we see this level break lower. In the near term, traders will be looking to sell any move back to the weekly highs around 1.4135/60.

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GBP/USD
The GBP/USD was also sold heavily lower overnight and broke below the important level at 1.6100. Currently, the pair is hovering close to the 1.6100 and this is clearly the ‘balance point’ for short term direction. Any move back above 1.6100 could see a short term retracement higher, but while below 1.6100, a move back to 1.6000 is a possibility.

USD/JPY
The USD/JPY remains trapped in the range for the moment, with the uptrend line at 81.50 and the horizontal resistance at 82.00 defining trade in the near term. The 82.00/25 zone now appears to be strong resistance and we’d remain bearish until we see a clear break of 82.25.

AUD/JPY
The Aussie-yen respected the levels defining its neutral symmetrical triangle formation overnight, heading lower from the top of the range at 87.20. The pair has now headed back to the lower end of the range and traders would be looking for a bounce to see the pair remain in this trading bracket in the near term.

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OIL
Oil fell back to find support around 97.00 before bouncing higher into the close of US trading. For now, crude looks to be consolidating after the sharp moves lower earlier in the month. Traders remain focused on the downside, with new shorts seen from 98.50, with any break of 96.50/97.00 seen as bearish.

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