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/JPY breaks higher for the first time in weeks as the BOJ calls the economy in a “severe” state.
  • UK inflation hits highest on record at 4.5% seeing GBP surge higher.
  • US housing starts fall indicating the US economy is far from recovering.
  • US treasury yields drop to 2011 lows as the economy fails to improve and traders start to consider the possibility of QE3.
  • Commodities have down day on US growth concerns.
  • US equity markets had a mixed night with the Dow up 0.55% and S&P500 and Nasdaq finishing the session flat.

AUD/USD
AUD failed yet again to get through 1.0500 and the reversal was swift on the release of the US housing data and AUD quickly bounced back to the highs. Traders seem content to play the range from the short side and with 1.0630/40 resistance so close it is tempting the sellers first up in Asia, but they are keeping a tight stop as a break of 1.0660 is quite bullish.

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XAU/USD
Commodities struggled yet again overnight and the failure to get back through 1500 has kept those with bearish sentiment very happy. This being said the failure to convincingly go on with it through 1480 is important and in most traders minds it is now a matter of waiting for the break for confirmation of the downward move or buying the break of 1500.

EUR/USD

EUR finally broke out of the downward trend last night with the bad US housing starts giving enough impetus for traders to momentarily forget about the issues in Europe. From here traders seem to be cautiously trading it from the long side but very aware that the problems in the Eurozone could come back to haunt them and the bullish sentiment could disappear quickly.

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GBP/USD
CPI in the UK came out the highest on record running at 4.5% seeing GBP aggressively bought up from 1.6200 through to 1.6300 extremely quickly. From there is has been in a wide range in a choppy trading session. Traders now seem to be happy buying the dip towards 1.6200 in the short term looking for a rally towards longer term resistance of 1.6400

USD/JPY
As mentioned in yesterday’s report, a break through 81.00 cause a major sentiment shift and the bulls took USD/JPY higher towards 82.00 as the BOJ mentioned that the Japanese economy is in a “severe” state. It was a very significant move yesterday and traders now see keen to play the range from the long side looking to buy the dip back towards 81.00

AUD/JPY
AUD/JPY broke through 86.00 resistance initially on the BOJ comments and volatility ensued for the rest of the overnight session. We open in Asia today neat the top of a wide range and sellers are expected initially around these levels and further towards 87.20 with traders keen to play the range from the short side unless we break through there.

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OIL
Oil traders continue to hold bearish sentiment although there seems to be decent buying interest continuing around the 95.00/50 region that held on the third occasion last night. From here traders are still calling for a test lower and eventually break through the buying interest and push through to 92.00 in the coming weeks.

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