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:

  • S&P downgrades Euro Zone bailout fund EFSF from AAA to AA+.
  • Markets generally quiet with Martin Luther King holiday in the US yesterday.
  • All eyes on the German ZEW Economic Sentiment out today.
  • Iran said - “that a disruption to Crude supplies through the straight of Hormuz would cause a shock to the markets that “no country” could manage.”
  • NASDAQ lost 0.51%, S&P 500 lost 0.49% and the DOW 0.39% at the end of last week, traders anxiously waiting for open tonight.

AUD/USD
The AUD is largely unchanged this morning still firmly entrenched in our recent trading range. The US market was closed overnight to observe Martin Luther King Day holiday which contributed to the lacklustre session as global markets digested and shrugged of a round of credit downgrades to debt-saddled Eurozone nations. All eyes will be on China’s retail sales and industrial production numbers due out today for next direction.

GOLD
A very quiet session for Gold overnight consolidating last week’s gains. Traders still seem a little unconvinced by our move above crucial 1640 pivot point. As volumes return to this precious metal we would expect Gold to continue its recent march higher to further test 1660 and eventually next very important downtrend resistance at 1700.

EUR/USD
Again a quiet session last night however The EURUSD is trading with a heavy tone of late. A break of 1.2620 supports opens up a world of pain for the EUR. We would suggest still trading the EUR from the short side with rallies to be sold into for a possible move below 1.2000 by mid-year. The golden rule is let the trend be your friend.

GBP/USD
The GBPUSD treaded water last night in holiday-thinned markets. The 1.5240 level continues to be a line in the sand for GBP. A move below here opens up a big move lower and would still suggest selling rallies towards 1.5360 if they occur.

USD/JPY
Someone should check the USDJPY for vital signs as this pair definitely went into hibernation overnight. An 18 point range yesterday hardly provided many opportunities for traders to take advantage of with recent trading range still firmly in place.

SILVER
No real change on silver with traders still looking for shorts on any move up to 30.00. The market will continue to focus on this strategy in the near term.

USD/CHF
Extremely tight range in USD/CHF with Martin Luther King’s holiday overnight. Technically the pair maintains a limited bullish tone but traders will look for a break of 0.9595 before adding to any long positions

GBP/JPY
The GBP/JPY had a limited range overnight but maintains its bearish pressure. Any rallies up to 118.10 area should see good selling interest emerge and as reported yesterday a break of 116.75 will be extremely bearish for this pair.

AUD/JPY
The AUD/JPY traded in a 40 point range yesterday. Longer term charts show a triangle pattern emerging with a break out due over the next few days. Will BOJ intervention be the catalyst that wakes this pair from its sleep or will a ratings agency target Japan for a downgrade?

OIL
Oil has managed to close above long term uptrend support. We remain quite bullish on this commodity and await a catalyst either from the Strait of Hormuz or union strikes in Nigeria to see Oil trade back to its 2011 highs of 115.00 a barrel.

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