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:

  • USD higher, equities sold, as risk aversion finally kicks in
  • AUD, NZD both make new record highs before late reversal; BNZ keeps rates on hold
  • EUR sharply lower as German finance minister warns ‘no blank cheque’
  • BoJ board member Kamezaki warns Japan will take ‘proactive’ action on yen gains
  • US share markets hit by heavy selling, Dow falls 1.6%
  • US employment numbers due at 10.30pm likely to take back seat to debt negotiations

AUD/USD
The Aussie surged to new post-float highs after yesterday’s higher-than-expected CPI numbers. The market has since pulled back to support at 1.1010 and traders will be looking to take new longs while we trade above 1.1010. A break below 1.1010 sets up a move to 1.0950.

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XAU/USD
Gold produced a false break above 1625 overnight and this sets up a move back to the lower end of the trading range at 1610. Traders will continue to focus on building new longs above that level, but with the market now apparently becoming more concerned about the US debt situation, the negative correlation between gold and the USD could be beginning to break

EUR/USD
Despite last night’s heavy selldown on the Euro, traders are likely to give the pair the benefit of the doubt and continue to favour longs while we trade above 1.4325. A clear break of 1.4325, however, will be seen as bearish

GBP/USD
Unsurprisingly, the pound is in a similar position to the Euro, with last night’s selldown seen as a warning that the pair might be due to reverse. That said, the market will remain bullish while the pair trades above 1.6260, but a break below that level will be bearish.

USD/JPY
The dollar-yen’s move lower continues with the recent move to 78.00 seen as an opportunity to take new shorts. Yesterday’s warning from the BoJ that they are considering policy move to intervene in the market might keep the market cautious

SILVER
As per most other markets, the overnight reversal has seen silver sent back to support at 40.00/20. Traders will be looking for new longs around this level, but a continuation of the USD strength could see silver break below lower support on this ascending triangle.

USD/CHF
The USD/CHF continues to be hit by the USD weakness and we didn’t see the same kind of greenback reversal as we saw in other markets. Traders will be waiting for a move back to resistance at 80.80 or a break below 80.00 for new shorts.

GBP/JPY
No real change with the ascending triangle formation dominating the price action. Traders will continue to take shorts around 128.20 until we see a clear break above this level while a break below 127.00 will also see further selling.

AUD/JPY
The market looks to be still bullish on the AUD/JPY and waiting for a clear break above 86.00. A pullback to 85.20 will also be seen as a buying opportunity.

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OIL
Crude has clearly broken lower and this now puts the ball in the bears’ court. Traders will be waiting for a move back to 97.00 in order to take new shorts.
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