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:

  • Commodities surge higher as data is released showing reduced inventories and reduced supplies of Oil.
  • AUD and NZD both recover on the commodity moves.
  • The majority of UK policy makers reported as being against rate rises as unemployment claims rose.
  • GBP sold aggressively as bond markets discount the chance of a rate rise in 2011.
  • Goldman Sachs report released overnight called for USD to continue to depreciate over the next 3 months on the back of bleak employment and growth prospects along with reduced confidence in the US.
  • US equity markets recovered strongly with the Dow up 0.65%, the S&P500 up 0.68% and Nasdaq finishing the session up 1.14%.

AUD/USD
AUD broke briefly higher in Asia but didn’t go on with it and drifted lower in fairly aimless trade. The rebound came on the back of the commodity recovery and while this continues there seems to be a battle ensuing and choppy trading is expected over the coming sessions until we get some clear direction as to where the next move will be.

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XAU/USD
Although Gold recovered well as commodities across the board rallied, there is a question mark as to why Gold didn’t convincingly break 1500.00. Traders are cautiously bullish at the moment but keeping a keen on 1500 as the point that would confirm their views. A break back through 1490.00 would see the bearish sentiment return.

EUR/USD
EUR drifted lower and retested the breakout point towards 1.4200 last night confirming the bullish tone for traders at the moment. From here it does seem as though patience is the key and buying the dip is where most trader’s sentiment lies initially targeting 1.4350 in the coming sessions. A break back through 1.4180/00 could however change the sentiment.

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GBP/USD
UK policy makers released their minutes overnight showing that the consensus was to keep rates on hold for the time being saw the GBP sold aggressively and an interesting point to note is that the UK bond markets have discounted the possibility of a rate rise in the short term factoring in 0.25 in Jan 2012 as the first sign of tightening.

USD/JPY
Buying the dip paid dividends for patient traders yesterday and the bounce off 81.00 has given those with bullish sentiment confidence to continue to buy the dip on any opportunity. Initially traders are respecting resistance towards 82.00 and thinking
we may get a drift lower before the buyer emerge again around 81.00/20

AUD/JPY
AUD/JPY initially rejected the 86.70 resistance but on the commodity recovery it was quickly back and easily broke. The third time around. Today 87.00/10 is the last (and strongest) level of resistance. From here traders are looking at this level holding first up but a break is an extremely bullish signal and it could be quickly to 88.00 should the level break

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OIL
Oil traders got caught short yesterday on the move through 98.00 as data showed an unexpected drop in inventories. Oil broker through to recent highs of 101.00 where the sellers emerged yet again. From here the bearish sentiment remains with traders seeing the last move as the opportunity to sell at better levels but a clear break of 101.00 could change sentiment

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