Weekly Market Brief (Forex and Commodities)

FOREX

AUD/USD – 0.7920 ( -186 or -2.29% )

As we go into an important week for the Aussie Dollar, the question now on everyone’s mind is can this market regain the key 80c level? 

VOLATILITY ALERTS:
Tue 11:30 – Retail Sales
Tue 11:30 – Trade Balance
Tue 14:30 – RBA Interest Rate Announcement
Thu 11:30 – NAB Quarterly Business Confidence
Thu 20:00 – RBA Governor Lowe Speaks
Fri 11:30 – RBA Monetary Policy Statement

For a move higher we must now see this market hold above 0.7903, followed by a strong break and close above 0.7934. Should this occur we will look for this market to test 0.7988. A strong break and close above 0.7988 could see this market post further gains into 0.8034.

If we cannot hold above 0.7903, we could see the AUD retest 0.7833. Should we break lower however, we will look for a move back into 0.7779 and if downside momentum continues we could see 0.7729 quickly before another pause.

EUR/USD – 1.2455 ( +27 or +0.22% )

The Euro continues to test one of our key upper areas between 1.2520 – 1.2460. Can this market break out of this range this week or will we see a reversal here?

VOLATILITY ALERTS:
Tue 03:00 – ECB President Draghi Testifies
Thu 19:45 – German Buba President Weidmann Speaks

For a move higher we would like to see the EURO break and close above the very important 1.2520 level, followed by a strong push into 1.2605 before another pause. Should this occur we could then see a very strong rally into 1.2769.

If the EURO cannot close above 1.2520, we could see a move back down to retest 1.2360. A close below this level is then likely to see a retest of the key level at 1.2268 before a pause. A strong break below this level may result in another move lower into 1.2167 and if momentum is very strong, we cannot rule out a big move lower into 1.2042.

GBP/USD – 1.4115 ( -35 or -0.25% )

Like the EURO, the Pound is also consolidating around our key level of 1.4223, and could be setting up for a strong move off this level this week.

VOLATILITY ALERTS:
Mon 20:30 – Services PMI
Wed 19:30 – Halifax HPI
Thu 23:00 – BoE Interest Rate Announcement
Fri 20:30 – Manufacturing Production

For a move to the upside we would like to see a strong break and close above 1.4259. Should this occur we will look for a move higher into 1.4382. A close above this level is likely to result in a push into 1.4469, and if momentum is very strong we cannot rule out a blow-off move to 1.4630.

On the downside, a strong close below 1.4075 could see the Pound tumble to 1.3875 – 1.3853 before a pause. Should we break this level however, we could see this market fall further into 1.3743 – 1.3725, and potentially lower into 1.3683 and 1.3654.

USD/JPY – 110.17 ( +154 or +1.42% )

The US Dollar and consequently the $/YEN was the biggest beneficiary of last week, having finally found a base and rallied.

VOLATILITY ALERTS:
Tue 10:50 – Current Account

For a move to the upside we must now see this market break and close above 110.31, on its way to retesting 111.09. Should this occur we will look for a move into 111.72, and a strong break and close above this level may see the $/YEN rally strongly into 112.68.

If we cannot close above 110.31, we could see a move back down into 109.04. A strong break below this level could see a further move down into 109.21, and momentum is very strong to the downside we may see a sharp move down into 108.31.

 

COMMODITIES

GOLD – 1332 ( -18 or -1.33% )

Last week Gold continued its drift lower closing just below our long-term level of 1333. This will be the level to watch this week.

For a continued move higher we would like to see this market hold and close strongly above 1333. Should this occur we will look for a strong move into 1355 before another pause. If momentum is very strong, 1375 cannot be ruled out.

If Gold cannot hold above 1333, we will look for a move back down into 1322. A strong break below this level could see GOLD sell off further into 1313, and if momentum is strong to the downside we could see 1303 before the week’s end.