FOREX Trading Australia – Foreign Exchange Market Summary
Dollar
· Dollar stabilized but remained under pressure ahead of today’s Trade Balance figures. With other regions reporting huge surpluses it is broadly feared that today’s outcome might be above $60 Bn in Deficit. Earlier in the Asian session, Dollar selling intensified after Japanese PM Koizumi hinted at diversifying from Dollar holdings but Ministry of Finance officials were quick to clarify his statements saying they had no plans in that direction.
Euro
· The Euro rose towards 1.3450 on Koizumi’s remarks but has failed to break decisively above that mark as it has gone into overbought territory but uncertainty surrounding the U.S. Trade Balance figures is keeping it supported on shallow dips. An acceptable outcome of the deficit could send the Euro back down to 1.3250 on a Dollar relief rally. Data from the zone came above expectations as German Trade Balance increased as did French Industrial Production.
Yen
· Koizumi’s remarks sent MoF officials rushing to clarify his position but the market knows that there is no smoke without fire, and
Pound
· The Pound again slipped back towards 1.92 after encountering strong offers on its foray above 1.93, BoE left rates unchanged which disappointed a small section hoping for a surprise rate hike. For now, strong support continues on any dips down towards the 1.9175-1.92 zone on Dollar’s weakness but any foray towards 1.9340 poses very strong resistance to the Pound.
Australian Dollar
· The Australian dollar slipped back in spite of a good employment report as the market instead turned its attention on the plunge in Consumer sentiment a day before. But that is likely to be forgotten soon by the market and the attention is bound to turn on the positives for the economy which more than outnumber the negatives. Good support exists around 0.7850 but inability to break past 0.80 could change sentiment against it.
Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Outcome |
|
|
|
January Machine |
|
-8.8% |
-2.2% |
Lower than expected but should pick up during the course of the year. |
|
|
|
January Industrial Production |
|
0.7% |
0.2% |
Came above expectations but overall sector remains slow. |
|
|
|
BoE Rate Decision |
|
4.75% |
4.75% |
In line with expectations, conditions not yet warrant a hike. |
|
|
|
January Wholesale Inventories |
|
0.4% |
1.1% |
Above expectations as higher industrial prod. has increased stocking of raw materials. |
|
Upcoming Economic Releases
|
GMT |
Release |
Region |
Previous |
Forecast |
Expectation |
|
|
January Housing Finance |
|
1.2% |
-1.0 |
Expected to decline as Housing sector remains mixed |
|
|
February Consumer |
|
47.4 |
48.2 |
Should inch higher as general conditions improve from last year. |
|
|
January Trade Balance |
|
-$56.4Bn |
-$56.6 |
Imports keep rising with possibility of a $60 bn plus figure. |
FOREX Technical Analysis
EUR/USD – Yesterday’s low was 1.3369 and high was 1.3454.
The pair closed at 1.3337.
It broke above 1.34 with resistance in the 1.3455-75 zone, for now the market is looking to buy on dips down to 1.3350-75 and strong buying interest on any move down towards 1.3275. On the upside a break above 1.3455 could lead to a rally towards 1.3495-1.3510 where the pair could witness some pullback on profit taking.
Key resistance is seen at 1.3465 followed by 1.3525 while support starts at 1.3370 followed by 1.3275.
USD/JPY – Yesterday’s low was 103.70 and high was 104.32.
The pair closed at 103.93
The pair has the potential of heavy movements on the downside on a high
Key Resistance is seen at 104.75 followed by 105.55 while support starts at 103.55 followed by 102.60.
GBP/USD – Yesterday’s low was 1.9203 and high was 1.9305.
The pair closed at 1.9234.
It has managed to gain on Dollar’s weakness with mild resistance around 1.9310 and a stronger one in the 1.9355-70 zone. As long as sentiment remains poor for the Dollar, the Pound remains supported on dips towards 1.92 and very strong support above 1.9125.
Key Resistance is seen at 1.9315 followed by 1.9375 while support starts at 1.9175 followed by 1.9115.
Australian Dollar
AUD/USD – Yesterday’s low was 0.7870 and high was 0.7980.
The pair closed at 0.7907.
The drop in local consumer sentiment has slipped it below 0.79 but good support should continue in the 0.7850-75 zone. Cue is taken from the general direction of other majors and outcome of
Key Resistance is seen at 0.7985 followed by 0.8025 while support starts at 0.7875 followed by 0.7845.
Kunal ‘Kris’ Sharma
Forex Analyst
Australian Financial Services License 246566
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