Market Insights

Headlines

8 August 2011

Equity futures crunched in early trade, Dow down 200, after S&P downgrades US debt to AA+ over weekend Forex markets see muted reaction to US downgrade, USD/CHF major mover AUD/USD loses around 20 pips in early Monday trading, support at 1.0400 holds Euro and pound both higher in early trading; rumours of upcoming coordinated EBC move Gold surges in first few minutes of trading; nears US$1700 before reversing Central bank intervention remains possibility; eyes on Fed, BoJ, ECB and SNB

AUD/USD
Resistance 1.0600 Support 1.0370 Market Sentiment

Bullish (while above 1.0370) The Aussie has seen some small losses in early morning trade as risk instruments were sharply sold lower. Looking at the daily chart above, we can see the Aussie is at a crucial juncture above 1.0370. A break of 1.0370 sets up further losses, but dont be surprised if we see a bounce from these levels. Stops under 1.0350 provide good risk/return for aggressive traders.

XAU/USD
Resistance 1695 Support 1682 Market Sentiment

Bullish Gold has been bought up in early Monday trading pushing as high as 1695 in early trade. The US downgrade should be bullish for gold and we could see a push above 1700 over the next few days. Support seen at 1682 and then 1640.

EUR/USD
Resistance 1.4430 Support 1.4300 Market Sentiment

Bullish The Euro remains dominated by the flag and we are clearly currently at an importance juncture on the charts. While we hold above 1.4300 the market could look to push Euro-dollar higher, with the Euro seeing some early buying on the back of the US downgrade.

GBP/USD
Resistance 1.6500 Support 1.6200 Market Sentiment

Bearish The GBP remains in the overall megaphone pattern with support back at 1.6200 and resistance at 1.6500. After an initial burst of buying, the GBP looks to have started to reverse from the highs and we could expect a move back to 1.6200. However, with the potential for USD weakness, a break above 1.6500 will be seen as bullish.

USD/JPY
Resistance 78.60 Support 77.80 Market Sentiment

Bearish The USD/JPY is a candidate for selling today as the negative impact from the US downgrade is likely to translate into USD/JPY weakness. In the near term, a move back to 78.50/60 is seen as sellable with the potential for a move back to 77.80.

SILVER
Resistance 39.90 Support 38.30 Market Sentiment

Bullish Silvers really been caught between a rock and a hard place over the last few trading sessions. After falling more than 10% in two sessions, silver has found support around 38.00 and, in addition to the USD weakness following the weekends downgrade, this could see the buying come into silver while we hold above 38.00/30.

USD/CHF
Resistance 78.00 Support 76.00 Market Sentiment

Bearish The USD/CHF is likely be hit by selling today but the market will need to see a break below 76.00 to take new positions. After last weeks losses in this pair, traders will be focusing on the dollar-Swiss as one of the better ways to take advantage of USD weakness.

GBP/JPY
Resistance 129.10 Support 128.20 Market Sentiment

Bearish The GBP/JPY is currently trapped in a range between 128.10 and 129.20 and traders will be looking to favour the short side in the near term. A break 128.20/00 is likely to be seen as a selling opportunity.

AUD/JPY
Resistance 81.80 Support 81.00 Market Sentiment

Bearish The AUD/JPY is likely to see selling today as it is highly leveraged to economic confidence. A break of 81.00 could be the trigger for further selling, while any move back to 81.80 is also likely to be seen as sellable.

OIL
Resistance 88.00 Support 83.00 Market Sentiment

Bearish Crude is clearly in the clutches of the bears at the moment and the US downgrade is also a negative for the instrument. From here, support is seen at 83.00 and any break below this level will be seen as bearish. A move to 88.00 will also be closely watched by sellers.

Economic Calendar
F/Cast
JPY: Bank Lending JPY: Current Account AUD: ANZ Jobs CHF: Unemployment

Last
-0.6% 0.39T 3.7% 3.0% CHF: Unemployment EUR: Investor Confidence GBP: BRC Retail Sales

F/Cast
3.0% 3.6

Last
3.0% 5.3 -0.6%

0.96T 3.0%

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