FOREX Trading Australia Daily Outlook 18/04/2005

FOREX Outlook 18/04/05 (02:00 GMT)

FOREX Trading Australia – Foreign Exchange Market Summary

Dollar

• Dollar slipped as the positives of the Capital inflow data coming in higher than expectations were more than offset by the negatives emanating from other factors. NY State Manufacturing index dropped to its lowest in 2 years while the stock market had the biggest single day drop in 2 years. Industrial Production data had its intrinsic weaknesses with G7 & IMF meets over the weekend leading to some profit taking on Dollar longs.

Euro

• The Euro rallied back towards the resistance zone of 1.2940-55 and managed to finish above 1.29. In spite of its impressive rebound, the Euro remains vulnerable with growth prospects looking sluggish. German Finance Minster Eichel expressed downside risks for the economy while officials from across the zone reiterated Asian nations to be more flexible in their currency stance. For now 1.2775 and 1.3010 are the likely range play levels.

Yen

• The Yen like other majors rallied against the Greenback with 108.55-70 zone continuing to hold strong offers for the Greenback. It is gaining in early trading especially against the Euro as more pressure is put on Japan to share the burden of a lower Dollar. Meanwhile the Japanese economy remains soft as Consumer Confidence index as well as Industrial Production came below expectations. For now, 106.90-107.10 remains as the strong Dollar bid zone.

Pound

• The Pound stayed within its broad range and was held back from the familiar pivot region of 1.8945-60 as of now. The market is eyeing key U.K. data with inflation and retail sales the main attraction. A rise is expected in both which should renew hopes of a rate hike in the near term.

Australian Dollar

• The Australian dollar took cue from other majors but found offers around 0.7725 to strong to breach and closed below 0.77. Commodities after their profit taking sell off have remained under pressure with a further sell off possible. In ability to break decisively past 0.7755 could see the Aussie slip back down to 0.7610-25 with strong support in that zone.

Economic Data Released

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FOREX Technical Analysis

EUR/USD – Friday’s low was 1.2778 and high was 1.2940.
The pair closed at 1.2925.

Weak U.S. data helped it break past the first resistance line before stabilizing around the strong resistance zone of 1.2935-50. Offers are lined up to 1.30 with a decisive break bring into focus resistance at 1.3055-75 with strong selling interest around that mark. On the downside a pullback towards 1.2855 is likely and a break below could accelerate losses towards 1.2775.

Key resistance is seen at 1.2955 followed by 1.3045 while support starts at 1.2855 followed by 1.2775.

USD/JPY – Friday’s low was 107.46 and high was 108.54.
The pair closed at 107.76.

Still within its recent range with market waiting for a decisive breakout, decent Dollar bid interest continues around 107.50 with a break below bringing into focus the very strong support zone around 106.90-107.10. On the upside mild resistance exists around 108.25 and 108.55 with very strong resistance in the 108.85-109./10 offered zone.

Key Resistance is seen at 108.55 followed by 109.15 while support starts at 107.45 followed by 106.95.

GBP/USD – Friday’s low was 1.8770 and high was 1.8948.
The pair closed at 1.8923.

It remains within its recent broad range with strong resistance in the 1.8955-70 zone. With a break above bringing the second line of resistance around 1.9025 with strong offers around it. On downside support comes up at 1.8855 with a break below likely to accelerate losses towards 1.8775 where buyers should come up.

Key Resistance is seen at 1.8975 followed by 1.9025 while support starts at 1.8855 followed by 1.8775.

Australian Dollar

AUD/USD – Friday’s low was 0.7650 and high was 0.7722.
The pair closed at 0.7679.

Dollar’s weakness helped it break back above 0.77 but resistance lies around 0.7725 with a break above bringing the offered zone of 0.7755-75 into focus. On the downside support lies around 0.7650 with very strong buying interest on dips below 0.76.

Key Resistance is seen at 0.7725 followed by 0.7775 while support starts at 0.7655 followed by 0.7605.

Kunal ‘Kris’ Sharma
Forex Analyst

Australian Financial Services License 246566

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