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 head lower as US debt crisis still unresolved
  • US dollar falls despite rise in bond yields
  • AUD moves back toward 1.0800 on US weakness
  • Gold, oil both higher as greenback eases
  • US markets give back early gains on debt worries, the Dow finished down 0.1%
  • Today’s agenda includes NAB business confidence a 11.30am and US unemployment claims at 10.30pm

AUD/USD
The Aussie continued higher overnight as the USD weakness benefited the local unit. That said, the Aussie remains stuck below 1.0800 and traders will be likely to continue using any move toward 1.0800 as an opportunity to short. A break of 1.0800, however, will be bullish.

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XAU/USD
Gold didn’t quite make it back to support at 1575, instead bouncing from 1580 before making a new push higher. Gold has obviously been supported by this US dollar weakness and this is likely to be the major driver in the near term. All eyes will be on resistance at 1610 and any move above this level will be seen as extremely bullish. A pullback to 1575/80 is also likely to

EUR/USD
Although it’s a line-ball call, we’ve shifted to bullish on the Euro after its strong bounce from 1.4000 and its overnight move above 1.4200. A break above 1.4300 is likely to create further bullishness with the potential for a move towards 1.4400.

GBP/USD
No real change on the GBP as it remains trapped in its week-long trading range. Last night’s MPC minutes suggested any rate rise is still a long way off but the market’s reaction was muted. Traders will continue to play the range while staying mindful that the dominant trend is to the downside.

USD/JPY
The dollar-yen eased lower overnight as the greenback’s debt-related woes hit the pair. Traders will now be focusing on a break below 78.50 as the next trigger for new shorts

SILVER

Silver saw some sharp selling over the last 48 hours but the white metal had bounced solidly thanks to US debt woes. After finding support at 38.20, silver has jumped 1.20 and this set up a potential move back to resistance at 40.80 and beyond.

USD/CHF
The USD/CHF produced a textbook reversal from previous support overnight, heading all the way to 82.20 before being sent lower. From here, this sets up a new move back to 80.80. In the near term, the US’s debt problems will be the major driver.

GBP/JPY
Like the GBP/USD, there’s been no real change on the GBP/JPY, with key resistance still seen at 128.20. Any move back to 128.20 is likely to be seen as an opportunity to sell at higher levels.

AUD/JPY
The AUD/JPY continues to be trapped by resistance at 84.20 and traders will focus on taking new shorts on any move back to this level. The targets for any down move are to 83.20. Traders should keep an eye on the AUD/USD pair as any break above 1.0800 on the AUD/USD could see buying on the AUD/JPY.

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OIL
Please note the August crude oil contract (CLQ1) has now expired and we are now trading the September contract (CLU1).
Crude remains trapped below 99 and traders will be focused on this level. While traders are likely to look for shorts around
this level, any break above 99 will be seen as bullish
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