Weekly Market Brief (Forex and Commodities)

FOREX

AUD/USD – 0.7225 ( +27 or +0.38% )

The Aussie dollar posted another positive week as this market threatens to end the sustained selling pressure we have seen all year.

VOLATILITY ALERTS:
Tue 14:30 – NAB Business Confidence
Wed 11:30 – Wage Price Index (quarterly)
Thu 11:30 – Unemployment Rate

For a move higher we would like to see the AUD break above 0.7229, followed by a break and close above 0.7282. A strong break and close above this level could see a quick move to 0.7364 before a pause; and if momentum remains strong we will look for a move back up into 0.7447.

If we cannot hold above 0.7229, we will look for a move back down to 0.7169. A strong break below this level may result in a move back down into 0.7112 before another potential pause. Any subsequent breaks of this level however may result in a very fast move down to 0.7070.

EUR/USD – 1.1344 ( -42 or -0.37% )

Sellers have returned to the Euro following a brief rest and the question on everyone’s mind is now will this market break a very big area?

VOLATILITY ALERTS:
Wed 21:00 – Flash GDP (quarterly)
Fri 19:30 – ECB President Draghi Speaks

For a sustained move higher we would like to see the EURO close and hold above 1.1335 early in the week. Should this occur we could see a strong move into 1.1453 and any breaks above this level may mean a quick move into 1.1496 before a pause. A strong close above this level however could see the EURO rally strong into 1.1613 by the week’s end.

If the EURO cannot hold above 1.1335, we could see a fast move down into 1.1249 before a pause. A strong break of this level may result in a move into 1.1201, however any weakness below this level could see a sharp drop into 1.1117 before the week’s end.

GBP/USD – 1.2972 ( +6 or +0.05% )

The Pound is also showing signs of weakness and we are keeping a close eye on this market.

VOLATILITY ALERTS:
Tue 20:30 – Unemployment Rate
Wed 20:30 – CPI (annual)
Thu 20:30 – Retail Sales (monthly)

For a continued move to the upside, we would like to see Cable close above 1.3035, followed by a retest of 1.3161 before a pause. Should this occur we will look for a move to 1.3191 and 1.3277; and if momentum is very strong we could see a re-test of last week’s highs into 1.3386.

On the downside, should we break and close strongly below 1.2868, we could see this market break quickly lower into 1.2720. A strong break below this level however sets this market up for a bigger move down into 1.2622.

USD/JPY – 113.82 ( +63 or +0.56% )

Last week we asked if the $/YEN is holding or or being supported? We noted $US strength early in the week but maintained it is an uphill battle from here. 

VOLATILITY ALERTS:
Wed 10:50 – Prelim GDP (quarterly)

For a continued move to the upside we must first see this market close above 113.86. Should this occur we will look for a retest of retest 114.52. A break above this level may see the $/YEN move higher into 115.54, and if momentum is very strong we will look for a move to 116.08.

If we cannot close above 113.86 we will look for a move back down into 112.39. A break below this level is likely to result in a retest of 111.73; and as we mentioned last week: Should we break below 111.73 WATCH OUT- the move that follows may be very sharp into 111.09 and 109.94.

COMMODITIES

GOLD – 1209 ( -23 or -1.87% )

GOLD was sold off aggressively on Friday following consistent selling all throughout the week. Can this market recover this week?

For a move higher we must see this market hold above 1206 on its way to retesting 1222. Should this occur we will look for a retest of 1238. A close above this level may likely see a further move to the upside into 1247 before a pause. Should momentum remain very strong, we could see a fast move into 1260.

If Gold cannot hold above 1206, we could see another quick decline into 1187. Any subsequent breaks of this level may result in further downside into 1180, and if momentum to the downside remains very strong we cannot rule out a move into 1170.