Weekly Market Brief (Forex and Commodities)

FOREX

AUD/USD – 0.7912 ( +104 or +1.33% )

The Aussie Dollar was steadily higher as risk has come back into the markets. Is this move showing signs that it's over, or is the rally just getting started? 

VOLATILITY ALERTS:
Tue 11:30 – Monetary Policy Minutes
Wed 11:30 – Construction Work Done (quarterly)

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 – 1.2410 ( +159 or +1.3% )

Like other markets the EURO has maintained its sideways consolidation and is now at a very key level. 

VOLATILITY ALERTS:
Wed 20:00 – Flash Manufacturing PMI
Wed 20:00 – Flash Sevices PMI
Thu 23:30 – ECB Monetary Policy Minutes
Fri 21:00 – Final CPI (annual)

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 – 1.4025 ( +199 or +1.44% )

Like the EURO, the Pound is also in a sideways consolidation; however like other markets has also managed to recover rallying 200 points last week. 

VOLATILITY ALERTS:
Tue 05:45 – BoE Governor Carney Speaks
Wed 20:30 – Unemployment Rate
Thu 20:30 – Second GDP Estimates (quarterly) 
Thu 20:30 – Prelim Business Investment (quarterly)

For a move to the upside we would like to see a strong break and close above 1.3875, on its way to retesting 1.4075.  A close above this level is likely to result in a push into 1.4194, and should momentum remain strong to the upside, we could see a move into 1.4223 by the week's end. 

If we cannot hold above 1.3875, we could see a quick move down into 1.3743 - 1.3725 before a pause. A continued sell-off may see another move lower into 1.3683, with a strong break below these levels meaning cable may trade down into 1.3534. 

USD/JPY – 106.29 ( -249 or -2.29% )

The $/YEN is now attempting to stage a reversal. Will we see a bounce higher this week or is there more downside left for this market? 

VOLATILITY ALERTS:
Mon 10:50 – Trade Balance
Wed 11:30 – Flash Manufacturing PMI

For a move to the upside we must now see this market break and close above 106.30, on its way to retesting 107.75. Should this occur we will look for a move into 108.31, and a strong break and close above 109.21 could then see a quick move into 109.94 before a pause. If we are to see a complete V-reversal and fade to the upside this week, we will not rule out a move to 111.09 by the end of the week. 

If however the USD/JPY cannot hold above 106.30, we will for a retest of 105.79. A break below this level could see the USD/JPY trade quickly down to 104.97 before a potential pause. Should we continue to trade lower and see continued downside pressure on the USD/JPY - a sharp move to 103.99 is possible. 

 

COMMODITIES

GOLD – 1347 ( +32 or 2.43% )

GOLD has once again come into our key area at 1355 and found sellers. Is this the week we finally break higher or will we now see a run on the precious metal?

For a continued move higher, we must now see this market break and close above 1356. Should this occur we will look for a move into 1365, and a close above this level could see further upside into 1371 and 1375. If momentum remains very strong, a blow-off move to 1393 cannot be ruled out.

If Gold cannot close above 1356, we will look for a strong move back down into 1333-1335. A strong break below this level could see GOLD sell off further into 1322, and if momentum is strong to the downside we could see a sharp move down into 1303.