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:

  • Global markets shudder lower as Italian bond yields breach 7%
  • Dow falls close to 400 points as risk sold sharply lower
  • Euro drops more than 300 pips as investors fear Italy will be next victim
  • USD sees major strength in flight to safety; USD/CHF surges
  • AUD breaks below 1.0200 as commodities plunge; gold falls below support at 1770
  • A big day of data ahead with Aussie jobs at 11.30am and BoE decision tonight

AUD/USD
The Aussie has been sent sharply lower as the market sells out of risk instruments and we can now see the AUD/USD trapped below 1.0200. A retracement back to 1.0200 provides the best selling opportunity. Alternatively traders will be looking to sell breaks to new lows.

GOLD
Gold looks to be fumbling at support at 1770 and after yesterday’s price action we could see some follow through selling into the Asian session. Over the medium term, the bias remains to the upside, and if 1770 does not hold, then a move back to 1755 or 1732 is likely to see the buyers come back into the market.

EUR/USD
The Euro perfectly rejected the 1.3850 level in yesterday’s Asian session before a massive selldown triggered by the rise in Italian bon yields saw the Euro plunge by over 300 pips. The pair looks to have found some support at 1.3520, but a break of that level is likely to see a continuation of the selling.

GBP/USD
The GBP/USD has pulled back to support at 1.5900 and traders will now be looking for longs around current levels. That said, a break of 1.5900 will be seen as bearish.

USD/JPY
As per yesterday, the dollar-yen has broken lower from consolidation and traders will be looking to get on board in line with the resumption of the trend. A retracement back to 78.00 provides a selling opportunity while a break below 77.50 will also be seen as a chance for new shorts.

SILVER
Silver, like gold, has pulled back to support, but the fact that silver has found buyers around that levels causes us to remain bullish on silver. Looking lower, support is also seen at 32.00.

USD/CHF
The USD/CHF looks well supported at the moment with the recent break above 0.9070 and signal that the dollar-Swiss is aiming for new highs. A pullback to 0.9070 will be seen as a buying opportunity.

GBP/JPY
The sterling-yen broke below 124.00 and the market will now be focused on the short side. A retracement back to 124.00 will be seen as the next chance to get short.

AUD/JPY
The Aussie-yen broke below 80.00 overnight and the market will now be looking for opportunities on the short side. A retracement back to 80.00 will be seen as a chance to get short.

OIL
Crude provided a great opportunity for traders that bought back at support with a move higher towards 98.00 overnight. However, we’ve seen a more bearish pattern emerge after crude was unable to hold above 97.00 and traders will be a little more cautious before taking new longs.

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