Australian FOREX Daily Outlook 30/03/2006

MARKET SUMMARY –30MAR06 (05:00GMT)

• The Dollar was mixed versus the major currencies in a subdued overnight trading session. There was nothing in the way of data to provide direction to the market and Federal Reserve Presidents, Timothy Geithner and Jeffrey Lacker made no comments on the US economy in speeches delivered overnight. In other markets, US shares rose overnight due to positive corporate news. The Dow Jones index closed up 61pts while the NASDAQ was up 33pts. Crude oil prices consolidated above US$ 66 a barrel overnight. Looking ahead and jobless claims are due out later today in the States and Fed President Poole is also due to speak.
  

• The Euro traded up from 1.1994 to a high of 1.2050, before closing near its highs in the New York session. In the Eurozone yesterday, German Gfk consumer confidence survey highest since December 2001, rises to 5.1 in April from 5.0 in March. ECB Officials doing the speaking rounds: Mersch seeing very strong and increasing risks from high asset prices, says that ECB must “walk the talk” on inflation, that is to “bring inflation close to but under 2%”. Gonzalez-Paramo sees risks to price stability including second round effects.
  
• The Japanese yen traded in a range of 117.49 to 118.22 versus the dollar, before closing at 117.80 in the New York session. Industrial production was released in Japan this morning and declined by 1.7% m/m, disappointing market expectations of a rise of 0.1% m/m, but had little impact on the Japanese yen.

• The Sterling traded down from 1.7443 to a low of 1.7317, before closing at 1.7370 in the New York session. Final revision UK Q4 GDP left original forecast unchanged, 0.6% on the quarter, 1.8% annual rate. UK Current Account deficit was steady at just under 11 bio GBP, or 3.6% of GDP. Also in the UK, CBI Distributive Trades survey reported retail sales a bit softer than expected ….improved marginally from a month earlier but retailers and analysts had forecast a significant bounce.
  
• The Aussie traded in a range of .7015 to 0.7074, before closing near its highs in the New York session.

TECHNICAL COMMENTARY

• Euro 1.2070

Initial support at 1.1951 (Mar 24 reaction low) followed by 1.1859 (Mar 10 reaction low). Initial resistance is now located at 1.2110 (61.8% retracement of the 1.2209 to 1.1951) followed by 1.2166 (Mar 21 high).

• Yen 117.60

Initial support is located at 116.25 (March 28 low) followed by 115.50 (Mar 20 reaction low). Initial resistance is now at 118.51 (Mar 24 reaction high) followed by 119.21 (Mar 13 high).

• Pound – 1.7400

Initial support at 1.7308 (Mar 24 reaction low) followed by 1.7230 (Mar 10 reaction low). Initial resistance is now at 1.7445 (Mar 29 high) followed by 1.7539 (Mar 28 corrective high).

• Aussie – 0.7100

Initial support at 0.7000 (Psychological support) followed by 0.6933 (Sept 15, 2004 low). Initial resistance at 0.7122 (Mar 28 corrective high) followed by 0.7152 (Mar 24 high).