Market Insights 20 May 2011

Headlines
USD struggles as data shows yet again that the economy is not recovering well with a drop in house sales and
weakening manufacturing data.
Commodities were under pressure again as the inflation outlook weakened on US data and demand for Oil
wanes.
UK Retail Sales come out better than expected seeing GBP surge.
Linkedin IPO doubles in the first day of trade giving equity markets and risk currencies a boost.
US equity markets closed with the Dow up 0.36%, the S&P500 up 0.22% and Nasdaq finishing the session up
0.30%.

AUD/USD
Resistance
1.0710/20
Support
1.0500/20
Market Sentiment

Bearish
(but wary of topside break)

AUD is slowly grinding higher as a weaker USD across the board is offset by the fact that commodities have struggled this
week. However, traders still seem keen to trade from the short side unless we break up through 1.0710/20 region expecting
at least one more push towards the 1.0500/20 lows next week.

XAU/USD
Resistance
1505.00
Support
1485.00
Market Sentiment

Rangy

Since earlier this week Gold has been trading in a wide range and traders seem to be waiting for the next move and go with
it. The important levels to watch are 1505.00 on the topside which is expected to create a significantly bullish signal
targeting 1520 and 1485 on the downside which could see 1470 tested quickly if broken.
 EUR/USD
Resistance
1.4350/60
Support
1.4250/60
Market Sentiment

Bearish
(short term reversal)

EUR continued to grind higher but we have now rejected from the important 1.4340/50 level which has caused traders to
expect a short term reversal looking for a pullback towards 1.4250 support intra-day. The bearish sentiment is expected to
continue if we break 1.4240/50 seeing 1.4100 being a target if this occurs. Only a break through 1.4360 changes sentiment.

GBP/USD
Resistance
1.6300/10
Support
1.6140/50
Market Sentiment

Bearish

There was a slightly stronger than expected jump in retail sales released overnight and traders bought GBP aggressively up
towards 1.6200/30 region and it has been supported since then. Traders are becoming quite used to mixed data out of the UK
economy recently but are still holding bearish sentiment as the bonds still pricing in a waiting game from policy makers.

USD/JPY
Resistance
82.00/20
Support
81.00/10
Market Sentiment

Bullish
(buying the dip)

USD/JPY continued higher last night but resistance was found towards the top of the trend channel around 82.20. Traders still
have bullish sentiment but patience is expected and the buyers seem to prefer to wait for better levels rather than chase the
market looking for a retracement back towards 81.00/20 before getting back into the market
 AUD/JPY
Resistance
88.00/10
Support
86.70/80
Market Sentiment

Bullish
(looking to consolidate)

AUD/JPY broke through 87.00 resistance but failed to go on with it and reversed quickly back towards the previous resistance
(now support) at 86.70 where the buyer emerged again. From here traders are preferring to trade from the long side so long
as we stay above 86.70 and are calling for 88.00 resistance to be tested early next week.

OIL
Resistance
101.00/50
Support
98.00/50
Market Sentiment

Bearish
(while below 101.00)

Trading oil from the short side again paid dividends as the selling interest around at 101.00 provided solid resistance and it
was quickly back down to 98.00 support on demand concerns. We open mid range however traders seem content to play iot
form the short side and are expecting a test of the all important 95.50 support in the coming sessions

Economic Calendar & Pivot Points

F/Cast Last F/Cast Last
» JPY: BOJ Interest Rate 0.10% 0.10% » CAD: Core CPI m/m 0.1% 0.7%
» EUR: German PPI m/m 0.6% 0.4% » CAD: CPI m/m 0.5% 1.1%
» JPY: BOJ Press Conference » CAD: Core Retail Sales m/m 0.8% 0.7%
» EUR: Current Account -6.5B -7.2B » CAD: Retail Sales 0.9% 0.4%
» »
Pivot Points AUD/USD XAU/USD EUR/USD GBP/USD USD/JPY AUD/JPY CRUDE OIL
Open 1.0664 1493.30 1.4309 1.6226 81.68 87.10 99.40
R3 1.0785 1514.52 1.4478 1.6381 82.90 88.69 103.26
R2 1.0733 1507.09 1.4401 1.6312 82.57 88.11 102.26
R1 1.0698 1500.97 1.4359 1.6269 82.14 87.66 100.63
PP 1.0646 1493.54 1.4282 1.6200 81.81 87.08 99.63
S1 1.0611 1487.42 1.4240 1.6157 81.38 86.63 98.00
S2 1.0559 1479.99 1.4163 1.6088 81.05 86.05 97.00
S3 1.0524 1473.87 1.4121 1.6045 80.62 85.60 95.37

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