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Market Insights 26 May 2011

Headlines
Risk appetite returns as commodities push higher
AUDUSD moves back above 1.0500 as equity markets improve
Gains seen despite poor result from US durable orders
GBP sees strong gains, but EUR hampered by debt woes
All 24 key commodities finish higher as USD weakens
In equity markets, the FTSE finished 0.2%% higher, while Dow was up 0.3%, the S&P 500 gained 0.3%,
while the Nasdaq jumped 0.6%

AUD/USD
Resistance
1.0700/20
Support
1.0470
Market Sentiment

Bullish

The Aussie dollar bounced back overnight after producing a false break below the bullish wedge pattern we have discussed
over the last couple of days. The market would see this false break as a bullish sign and the Aussie is now expected to move
back to the top of the pattern. The 1.0700/20 level provides important resistance.

XAU/USD
Resistance
1575
Support
1526
Market Sentiment

Bullish (on the break)

Along with the rest of the commodities market, gold gained overnight, but the precious metal’s moves were restrained by
resistance at 1526. As we open today’s Asian session, gold is trading right on this level, and the future movement of the pair
will be determined by how prices react to this level. While above 1526, the picture is more bullish.
 EUR/USD
Resistance
1.4135/60
Support
1.4030
Market Sentiment

Bearish

The Euro is presenting a more bullish picture after the last 24 hours, but with European debt woes still at the forefront of
investors’ minds, traders will need to see further confirmation before committing to longs. A clear break of 1.1460 would be
bullish. In the mean time, traders will be watching resistance at 1.4135/60.

GBP/USD
Resistance
1.6200
Support
1.6300
Market Sentiment

Bullish

The GBP/USD broke out of its downtrend line overnight and this now shifts the tone of the market to bullish. Support is now
seen at 1.6300 while resistance moves higher to 1.6400. However, traders will be watching the European open carefully, as
the bears might take this move higher as an invitation to take new shorts.

USD/JPY
Resistance
82.00/25
Support
81.80
Market Sentiment

Bearish

No change here, with the USD/JPY still defined by the broad ascending triangle. Until we see a break of 82.25, traders will
continue to take shorts up near resistance. That said, a break of 82.25 will be bullish.
 AUD/JPY
Resistance
87.20/40
Support
85.30/50
Market Sentiment

Ranging

As we discussed in the USDJPY analysis, the yen crosses have seen very little action recently. The Aussie-yen remains in its
neutral symmetrical triangle formation and traders will be waiting for a move back to either support or resistance to continue
and play the range. A break higher with the AUDJPY is now looking more likely.

OIL
Resistance
104
Support
96.40
Market Sentiment

Bullish

Crude oil broke higher overnight along with the rest of the commodities space. From here, the market is more bullish on crude,
with the possibility of a move back to 104 not out of the question. Support is seen back at 100.

Economic Calendar & Pivot Points

F/Cast Last F/Cast Last
» »
» AUD: Private Cap Expenditure 2.8% 1.3% » USD: Prelim GDP q/q
» CHF: Trade Balance 2.05B 1.09B » USD: Unemployment Claims 412K 409K
» CHF: Employment Level 4.10M 4.09M »
» EUR: ECB Pres. Trichet »
» »
Pivot Points AUD/USD XAU/USD EUR/USD GBP/USD USD/JPY AUD/JPY CRUDE OIL
Open 1.0522 1525.06 1.4082 1.6272 82.04 86.34 101.15
R3 1.0702 1542.83 1.4237 1.6499 82.57 88.04 105.88
R2 1.0631 1537.52 1.4178 1.6396 82.37 87.35 103.75
R1 1.0581 1531.72 1.4132 1.6337 82.20 86.86 102.46
PP 1.0510 1526.41 1.4073 1.6234 82.00 86.17 100.33
S1 1.0460 1520.61 1.4027 1.6175 81.83 85.68 99.04
S2 1.0389 1515.30 1.3968 1.6072 81.63 84.99 96.91
S3 1.0339 1509.50 1.3922 1.6013 81.46 84.50 95.62

Forex Capital Trading – Ph 1800 ForexCT