FOREX Trading Australia Daily Outlook 01/04/05

FOREX Outlook 01/04/05 (01:00 GMT)

FOREX Trading Australia – Foreign Exchange Market Summary

Dollar

• Mixed data results kept the Dollar under pressure as Jobless claims surged unexpectedly while the PCE deflator showed a modest rise which dissatisfied a market looking for a higher figure on Fed’s recent concern. However in true Dollar style, it reversed most of its losses as a booming Chicago PMI result caught bears on the wrong foot. The employment sub index rose to its highest level in more than 20 years. Focus shifts to Payrolls data (13:30 GMT) with anything below 200 K likely to hurt the Dollar.

Euro

• The Euro helped by weak U.S. data broke above 1.30 but a strong Chicago PMI and decent sized offers around 1.3025 prevented further gains before it stabilized around 1.2950. For now, fundamentally the Euro doesn’t have much to stand on with German and French unemployment rates inching higher while the Zone’s Business Climate Indicator as well as Consumer Confidence coming in lower than expected.

Yen

• The Yen has seen interesting price action as it was helped by fiscal year end price adjustments and break below 107 but this morning’s Tankan Large Manufacturers survey has come in much lower than expected sending the Yen back towards 107.40. As they are more affected by global slowdown and high energy prices, confidence levels have come down but underlying fundamentals remain steady. A break above 107.75 could accelerate losses for the Yen.

Pound

• The Pound continued to rally breaking above 1.89 but like the Euro it met with strong offers. But unlike the Euro-Zone, data has been positive from U.K. apart from the dip in House prices but that is largely expected. Consumer Confidence inched higher while mortgage approvals gained more than expected. Its high yield advantage has helped it rally against the Euro but has strong resistance in the 1.8925-40 zone on the main pair.

Australian Dollar

• The Australian dollar followed other majors’ direction and rallied up to 0.7775 before stabilizing around 0.7720. Decent support remains on dips down to 0.7675 as price action is limited ahead of the U.S. payrolls and RBA’s meeting next week. This morning’s data has seen Building Approvals fall against expectations.

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FOREX Technical Analysis

EUR/USD – Yesterday’s low was 1.2912 and high was 1.3017.
The pair closed at 1.2953.

Mixed U.S. data helped it clear 1.30 but strong offers lie around 1.3025. It has decent support around 1.2950 with good buying interest on dips down to 1.29. Payrolls might direct the pair 1.2855 and 1.3075 the likely extreme ends of any movement. Another scenario is for the pair to remained locked in range bound movements within the 1.29 region

Key resistance is seen at 1.3025 followed by 1.3155 while support starts at 1.2875 followed by 1.2785.

USD/JPY – Yesterday’s low was 106.63 and high was 107.48.
The pair closed at 107.26.

Fiscal year end and a weak Tankan survey result has resulted in whip saw price action. Strong Dollar bids should continue in the 106.50-75 zone while a break of the resistance mark of 107.75 could accelerate losses for the Yen. If Payrolls is a non event then the pair is likely to stay within the 106.75-107.75 region.

Key Resistance is seen at 107.85 followed by 108.40 while support starts at 106.75 followed by 106.20.

GBP/USD – Yesterday’s low was 1.8754 and high was 1.8917.
The pair closed at 1.8873.

The Pound broke above the resistance zone of 1.8855-70 on good data but faced strong offers in the 1.8915-30 zone. It has stabilized for now, around 1.8850 with U.S. data eyed; the pair is prone to the volatile movements with a drop back to 1.8740 likely a break below could accelerate losses. On the upside a break above the strong resistance zone could accelerate gains towards 1.90.

Key Resistance is seen at 1.8925 followed by 1.9015 while support starts at 1.8755 followed by 1.8675.

Australian Dollar

AUD/USD – Yesterday’s low was 0.7706 and high was 0.7774.
The pair closed at 0.7726.

The Aussie faced strong offers around the first line of resistance mark 0.7775; a break into the 0.78 zone would face stronger resistance around 0.7825. On the downside decent support exists around 0.7675 with a decisive break below could accelerate losses.

Key Resistance is seen at 0.7775 followed by 0.7835 while support starts at 0.7675 followed by 0.7645.

Kunal ‘Kris’ Sharma
Forex Analyst

Australian Financial Services License 246566

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