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:

  • US markets once again end the session strong NASDAQ up 0.67%, the S&P 500 up 0.49% and the DOW up 0.36%.
  • Euro rallies after European bond auctions.
  • Jobless claims in the US drop to lowest in almost 4 years- great news USD/JPY at top of the range.
  • Google shares crushed after disappointing earnings report.
  • Look out for the Chinese Flash Manufacturing PMI today and the British Retail Sales tonight.
  • AUD/USD

The AUD has opened here this morning relatively unchanged just above 1.0400. Risk sentiment rallied during the offshore session following successful bond auctions in France and Spain. Meanwhile in the US the number of Americans filing for new jobless benefits fell to a 4 year low suggesting the US economy has maintained the momentum into the New Year.

GOLD
Gold fell from resistance levels breaking ranks with the EUR and US equities as tame US inflation data prompted bullion investors to take profit after a 3 day rally pushed Gold to its highest level in over 4 weeks. Gold continues to make higher highs and higher lows suggesting a break higher from our current trading range with 1640 continuing as good support for now.

EUR/USD
EUR continues its 3 day rally closing on the highs again overnight. US corporate earnings cheered investors with most financials and tech companies achieving or exceeding analysts’ estimates. Investors still wary of developments in Greece’s debt reduction talks with private creditors however some sense of optimism has returned to this pair. Amazing what a difference 3 days can make?

GBP/USD
GBP along with the EUR has surprised most traders continuing its 3 day rally. Sentiment is changing to neutral as optimism of a Euro zone debt recovery led by the IMF and World Bank continues. We still don’t believe the GBP is completely out of the woods but has definitely recovered some of its recent losses easily. It will be interesting to see if the rally continues as risk assets look to close one of its best weeks in some time.

USD/JPY
USDJPY traded recent range beautifully again overnight with a test of lows to 76.55 before a rally after better than expected US jobless claims provided traders with the confidence for the move to top of recent range to 77.32. Profit-taking saw us close back to mid range. This 60 point range is providing numerous opportunities for the patient ones amongst us.

SILVER
Silver continues to hug its uptrend support line and trades above the hourly 21 EMA signalling more gains to come. Long term target remains $34.00oz and only a daily close below 29.75 level will negate this view.

USD/CHF
USD/CHF has pulled back to and held strong support level around 0.9315 overnight. Traders will expect a strong rebound from these levels for a fresh impulsive move back to around 0.9400 area.

GBP/JPY
The GBP/JPY has made gains for the second straight day. Traders will continue to sell into this strength for a move lower in upcoming sessions. Only a daily close above 120.20/30 area will reverse their view.

AUD/JPY
The AUD/JPY continued to make overnight gains but may have formed a double top around 80.50 levels. Failure to break above here will see this pair come under renewed pressure.

OIL
Oil came under pressure overnight with the International Energy Agency forecasting a sharp slowdown of crude demand this year. Of course the Iran-West relations will play their role against the forecasted fall in prices and we remain bullish on this commodity until we see a daily close below 99.50 a barrel.

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