Market Brief (Forex and Commodities)

FOREX

AUD/USD – 0.7199 ( -114 or -1.56% )

The Aussie dollar sold off every day last week amidst continued uncertainty across global markets. This week we find this market at a key support area.

VOLATILITY ALERTS:
Wed 10:30 – Westpac Consumer Sentiment

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 – 1.1401 ( +82 or +0.72% )

With more turmoil in France the Euro is now under pressure to stabilise above 1.1300. Can the Euro hold above this key handle this week going into the Interest Rate Announcement?

VOLATILITY ALERTS:
Thu 23:45 – ECB Interest Rate Announcement 
Fri 00:30 – ECB Press Conference
Fri 20:00 – Euro area Flash Manufacturing PMI
Fri 20:00 – Euro area Flash Services PMI

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 close 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 – 1.2733 ( -20 or -0.16% )

The stage is set for a very big week in Cable, with the upcoming House of Commons vote scheduled for Tuesday. This will be a very important decision regarding Brexit prospects.

VOLATILITY ALERTS:
Mon 20:30 – GDP (monthly)
Mon 20:30 – Manufacturing Production (monthly)
Tue 20:30 – Unemployment Rate
Tue TBC – Brexit Parliamentary vote

For a continued move to the upside, we would like to see Cable close above 1.2868, followed by a retest of 1.3035 and 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 fail to close above 1.2868, we will be watching the key 1.2720 level very closely. A strong break below this level however sets this market up for a bigger move down into 1.2622; and if downside momentum remains strong we could see a quick drop into 1.2480.

USD/JPY – 112.68 ( -84 or -0.74% )

The $/YEN has put in a short-term double bottom and the question now is will the $US find buyers?

For a move to the upside we must now see this market hold above 112.68. Should this occur we will look for a retest of 113.87 before another pause; with the potential for a quick move into 114.08.

If we cannot hold above 112.68, we are likely to see a move down into 111.73. A strong break and close below this level could result in a move back down to 111.09, and if momentum to the downside is very strong we may see a very sharp move down into 110.45.

COMMODITIES

GOLD – 1248 ( +26 or +2.13% )

Last week we said watch out for a move very soon; and Gold has begun its swing higher. We are now at a very important area (1245-1247); and if Gold can clear this level we could see a sustained move higher into next year.

For a continued move higher we would like to see this market close above 1260. Should this occur we could see a retest of 1276-1278 before a pause. A strong break above 1278 may likely result in a move to 1285; and if momentum is strong we cannot rule out a move to 1294..

If Gold cannot close above 1260, we will look for a move back down to 1245. A break below this level however could result in a very sharp move down to 1238, and if momentum is very strong to the downside we cannot rule out a move to 1222.