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Market Insights 17 May 2011

Headlines
EUR/USD initially recovers on the meeting of EU leaders to try and alleviate the sovereign debt crisis.
EU leaders endorse the US118bn rescue package for Portugal.
AUD traders eagerly await the release of RBA minutes this morning.
IMF Managing Director spends the night in US prison on attempted-rape charges causing concern for possible
IMF input in rescue package.
Commodities have a negative day as Oil falls 2%, Gold down $15 and Silver languishes on the lows.
In equity markets, European markets had another down day, with US markets following with the Dow off
0.38%, S&P500 down 0.62%, and the Nasdaq having a shocker down 1.63%

AUD/USD
Resistance
1.0630/00
Support
1.0500/20
Market Sentiment

Range-bound
(waiting for RBA minutes)

AUD had and extremely choppy night with an early rally in Europe on the positivity surrounding the Portugal rescue package
seeing risk currencies bought strongly. This euphoria didn’t last long however and as commodities got sold aggressively the
AUD also felt the effects. Today seems dependant on what the RBA has to say in their minutes and looks range-bound prior.

XAU/USD
Resistance
1500.00
Support
1480.00
Market Sentiment

Bearish
(looking to sell rally)

Patient traders yet again have smiles on their faces as selling the rally paid the bills last night. From here the bearish tone
remains as commodities across the board look heavy in most trader’s minds. Those not short already are looking to sell again
towards 1500.00 but most now calling for a break of 1480 in the near future.
EUR/USD
Resistance
1.4230/40
Support
1.4050/60
Market Sentiment

Sell the rally


(Being patient initially)

The approval of the Portuguese rescues package gave enough positive sentiment to take EUR from the lows initially but the
sellers emerged on the rally as many expected and yet again patient traders have profited. From here the sentiment continues
to be calling for a lower EUR and unless we break cleanly through 1.4250/00 traders are still calling for a break of 1.4050.

GBP/USD
Resistance
1.6250/60
Support
1.6140/50
Market Sentiment

Bearish
(While below 1.6260)

GBP has again been fairly quiet in comparison to the EUR overnight as the EUR/GBP moves have been keeping GBP contained
in a range. Traders are still happy to sell the rally ahead of tonight’s CPI release and it seems that only a very strong number
(above 4.5%) could see the sentiment shift.

USD/JPY
Resistance
81.00/10
Support
80.50/60
Market Sentiment

Bearish

USD/JPY had another quiet night but traders are now starting to feel that a break is imminent and traders are keenly keeping
an eye on the topside levels of 81.00/10 as currently bearish sentiment remains but a break back up through there could see
the bulls emerge and a push towards 82.00. Failing that a break back through 80.60 keep the bears happy.
AUD/JPY
Resistance
85.80/00
Support
85.00/10
Market Sentiment

Bearish
(while below 86.00)

AUD/JPY broke upwards as the AUD rallied in early Europe but the sellers emerged towards the 86.00 resistance. Traders still
seem keen to play it from the short side heading into the RBA minutes this morning and unless we clearly break up through
86.00 this sentiment looks set to continue.

OIL
Resistance
100.00/50
Support
96.00/50
Market Sentiment

Bearish
(while below 100.00)

Oil traders selling the rally and staying short below 100.00 had a good session again last night. We are now approaching the
critical support around 96.00 and there is expected to be some initial support around there but the overwhelming sentiment
amongst traders at the moment is to stay short with many expecting the break later this week targeting 92.00

Economic Calendar & Pivot Points


F/Cast Last F/Cast Last
» AUD: Monetary Policy Minutes » German ZEW Eco Sentiment 4.8 7.6
» EUR: ECOFIN Meetings » EUR: ZEW Eco Sentiment 17.9 19.7
» GBP: CPI y/y 4.2% 4.0% » GBP: BOE Inflation Letter
» GBP: Core CPI y/y 3.4% 3.2% » USD: Building Permits 0.58M 0.55M
» »
Pivot Points AUD/USD XAU/USD EUR/USD GBP/USD USD/JPY AUD/JPY CRUDE OIL
Open 1.0574 1489.32 1.4161 1.6200 80.85 85.50 97.03
R3 1.0757 1516.28 1.4437 1.6342 81.42 87.12 101.57
R2 1.0699 1510.34 1.4341 1.6299 81.24 86.60 100.60
R1 1.0628 1499.88 1.4241 1.6246 81.03 85.96 98.80
PP 1.0570 1493.94 1.4145 1.6203 80.85 85.44 97.83
S1 1.0499 1483.48 1.4045 1.6150 80.64 84.80 96.03
S2 1.0441 1477.54 1.3949 1.6107 80.46 84.28 95.06
S3 1.0370 1467.08 1.3849 1.6054 80.25 83.64 93.26

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