Market Insights 23 May 2011

Headlines
US Congress agrees to raise debt ceiling according to media reports
Eurzone debt fears dominate weekend news after Fitch downgrades Greece three notches
Commodities generally weaker on European debt worries and US growth fears
Risk currencies, like the AUDUSD and EURUSD, both lost ground on Friday
Friday’s data saw stronger inflation data from Germany, but Canada consumer data disappointed
In equity markets, the FTSE closed down 0.1%, while Dow was down 0.7%, the S&P 500 fell 0.8%, while
the Nasdaq dropped 0.7%

AUD/USD
Resistance
1.0710
Support
1.0500
Market Sentiment

Bearish

The Aussie dollar has been dominated by the short-term downtrend that has been in place since early May and we can see
the downtrend line comes into play just above 1.0700. This has confluence with the horizontal resistance also near 1.0700
and traders will be looking to take new shorts around this level. Support is seen near 1.0500.

XAU/USD
Resistance
1526.00
Support
1500.00
Market Sentiment

Bullish
(Buying the dip)
Gold looks to have broken out of the short-term downtrend over the last couple of days and now appears to be setting up for
another leg higher. With commodity markets extremely volatile, however, traders are more cautions at the moment. On the
top side, resistance is seen at 1526, while support is seen at 1490 to 1500.
 EUR/USD
Resistance
1.4890/00
Support
1.4760/70
Market Sentiment

Bearish

The Euro is looking increasingly sick as the Eurozone debt woes worsen. In recent days, the Euro has been stuck between
resistance at 1.4340 and support at 1.4050. Within this zone, we have also seen a bearish edge forming, adding to the
downside pressure. A break of 1.4050 will be seen by the market as extremely bearish.

GBP/USD
Resistance
1.6300
Support
1.6100/50
Market Sentiment

Bearish

The GBP/USD is also trapped in a downtrend with the pair trading in a broad consolidation pattern between 1.6100 and
1.6300. Traders will be waiting for another move back toward 1.6300 before taking new shorts. A break of 1.6100 could also
be seen as bearish. Support seen from 1.6100 to 1.6150.

USD/JPY
Resistance
82.00/20
Support
81.40
Market Sentiment

Bearish

The USD/JPY could see some selling pressure in the near term after prices rejected higher levels above 82.00. This is typically
seen as a bearish sign and is line with the dominant downtrend. A break of the uptrend line at 81.40 would also be seen as
bearish. That said, the greenback has recently been stronger, and any break of 82.20 voids the bearish view.
 AUD/JPY
Resistance
87.20/40
Support
85.30/50
Market Sentiment

Bearish

The Aussie-yen is currently consolidating, which is typically neutral, but trade has clearly halted near the top of the pattern.
From here, the path of least resistance is to the downside, with support seen at 85.30/50. Bear in mind that a break above
resistance, at 87.20/40, would shift the market’s focus back on the upside.

OIL
Resistance
100.000
Support
95.00
Market Sentiment

Bearish

Oil also presents a picture of consolation with the “black gold” trading in a bearish descending triangle since the sharp falls in
early May. Oil is currently trading near the top of the pattern and traders would be looking to take positions in the expectation
of a move back to the lower end of the pattern. Ant break of 100 is likely to be seen a bullish.

Economic Calendar & Pivot Points

F/Cast Last F/Cast Last
» »
» CNY: HSBC Flash Man PMI 51.8 » EUR: Flash Manufacturing PMI 57.6 58
» JPY: BOJ Monthly report » EUR: Flash Services PMI 56.6 56.7
» EUR: French Manufact. PMI 57 57.5 » CAD: Bank Holiday
» » GBP: MPC Tucker speaks
» »
Pivot Points AUD/USD XAU/USD EUR/USD GBP/USD USD/JPY AUD/JPY CRUDE OIL
Open 1.0624 1513.76 1.4104 1.6212 81.75 86.85 99.96
R3 1.0807 1551.99 1.4504 1.6435 82.22 88.13 105.52
R2 1.0759 1533.92 1.4424 1.6369 82.04 87.76 102.97
R1 1.0707 1522.73 1.4292 1.6297 81.84 87.42 101.46
PP 1.0659 1504.66 1.4212 1.6231 81.66 87.05 98.91
S1 1.0607 1493.47 1.4080 1.6159 81.46 86.71 97.41
S2 1.0559 1475.40 1.4000 1.6093 81.28 86.34 94.85
S3 1.0507 1464.21 1.3868 1.6021 81.08 86.00 93.35

Forex Capital Trading – Ph 1800 ForexCT