Market Insights 24 May 2011

Headlines
Markets continue to tumble as European debt and US growth fears dominate news wires `
Key risk currencies, like AUDUSD and EURUSD, both break below key levels
Flight to safety sees USD and JPY strengthen
Commodities generally weaker as USD gains continue
Emerging markets fall the most in close to a year as fear increases
In equity markets, the FTSE closed down 1.9%, while Dow was down 1.1%, the S&P 500 fell 0.8%, while
the Nasdaq dropped 0.7%

AUD/USD
Resistance
1.0710
Support
1.0500
Market Sentiment

Cautiously bullish
in the near term

The Aussie fell sharply last night but found support at 1.0480/500 in what now appears to be a bullish wedge formation.
While taking long positions is against the short-term trend, traders expect to see a small counter-trend rally in the near
term. Traders will be looking to promptly take profits on any long positions, while a break of 1.0480 will be very bearish.

XAU/USD
Resistance
1526.00
Support
1480.00
Market Sentiment

Bullish

Gold continued higher overnight, bucking the trend of falling commodity markets, and traders again focused on the fear
factor gripping the global economy. Traders will be waiting for a break of 1526 to take new longs; however, we might expect
gold to consolidate in the near term.
 EUR/USD
Resistance
1.4135/60
Support
1.3970/4000
Market Sentiment

Bearish

The Euro was met by heavy selling overnight as European debt woes remain at the forefront of traders’ minds. While the pair
found some support around 1.4000, traders believe it is only a matter of time before we see this level break lower. In the near
term, traders will be looking to sell any move back to the weekly highs around 1.4135/60.

GBP/USD
Resistance
1.6100
Support
1.6000
Market Sentiment

Bearish

The GBP/USD was also sold heavily lower overnight and broke below the important level at 1.6100. Currently, the pair is
hovering close to the 1.6100 and this is clearly the ‘balance point’ for short term direction. Any move back above 1.6100
could see a short term retracement higher, but while below 1.6100, a move back to 1.6000 is a possibility.

USD/JPY
Resistance
82.00/25
Support
81.50
Market Sentiment

Bearish

The USD/JPY remains trapped in the range for the moment, with the uptrend line at 81.50 and the horizontal resistance at
82.00 defining trade in the near term. The 82.00/25 zone now appears to be strong resistance and we’d remain bearish until
we see a clear break of 82.25.
 AUD/JPY
Resistance
87.20/40
Support
85.30/50
Market Sentiment

Ranging

The Aussie-yen respected the levels defining its neutral symmetrical triangle formation overnight, heading lower from the top
of the range at 87.20. The pair has now headed back to the lower end of the range and traders would be looking for a bounce
to see the pair remain in this trading bracket in the near term.

OIL
Resistance
98.50
Support
97.00
Market Sentiment

Bearish

Oil fell back to find support around 97.00 before bouncing higher into the close of US trading. For now, crude looks to be
consolidating after the sharp moves lower earlier in the month. Traders remain focused on the downside, with new shorts seen
from 98.50, with any break of 96.50/97.00 seen as bearish.

Economic Calendar & Pivot Points

F/Cast Last F/Cast Last
» »
» NZD: Inflation Expec q/q 2.6% » GBP: Public Sector Borrowing 5.0B 16.4B
» EUR: German Final GDP q/q 1.5% 1.5% » USD: New Home Sales 305K 300K
» EUR: German Info Business 113.9 114.2 »
» »
» »
Pivot Points AUD/USD XAU/USD EUR/USD GBP/USD USD/JPY AUD/JPY CRUDE OIL
Open 1.0511 1517.01 1.4048 1.6118 81.94 86.13 97.05
R3 1.0744 1533.17 1.4271 1.6348 83.01 88.01 103.45
R2 1.0691 1525.39 1.4203 1.6290 82.55 87.48 101.79
R1 1.0586 1519.41 1.4105 1.6183 82.25 86.73 99.67
PP 1.0533 1511.63 1.4037 1.6125 81.79 86.20 98.01
S1 1.0428 1505.65 1.3939 1.6018 81.49 85.45 95.89
S2 1.0375 1497.87 1.3871 1.5960 81.03 84.92 94.23
S3 1.0270 1491.89 1.3773 1.5853 80.73 84.17 94.23

Forex Capital Trading – Ph 1800 ForexCT