Australian FOREX Daily Outlook 21/04/2006

MARKET SUMMARY –21APRIL06 (05:00GMT)

• The Dollar strengthened across the board overnight due to profit taking. On the data front, the Philadelphia Fed survey rose from 12.3 in March to 13.2 in April. Analysts had expected a rise of 14.0. The US leading indicator fell 0.1% in March, following a downwardly revised 0.5% fall in February. In other markets, US shares were mixed, with the Dow Jones up 65pts and the NASDAQ fell by 8pts. Crude oil traded lower overnight, ending a strong run over the past few days. Crude oil fell by US22c to US$71.95 a barrel.
  

• The Euro traded down from 1.2362 to a low of 1.2287, before closing at 1.2320 in the New York session. On the data front, Euro zone harmonised inflation in line with forecasts at 0.6% in March, with yr/yr inflation easing to 2.2% from 2.3% in Feb.
  

• The Japanese yen traded in a range of 117.33 to 117.90, before closing at 117.55 in the New York session.
  

• The Sterling traded down from 1.7923 to a low of 1.7756, before closing at 1.7785 in the New York session. UK CPI lower than expected in March, printing at 0.2% vs. 0.4% forecasts and with the yr/yr change at plus 1.8% [vs. 2.0% forecasts]. Sterling dropping 70 points to 1.7820.
  
• The Aussie traded down from 0.7449 to a low of 0.7357, before closing at 0.7370 in the New York session.
  
• In Precious metals, silver fell by 14% to $12.52 an ounce making it the biggest one day fall in 19 years. Gold also succumbed to profit taking and fell by US$12.90 an ounce to US$623.10.

TECHNICAL COMMENTARY

• Euro 1.2305

Initial support at 1.2284 (Apr 19 reaction low) followed by 1.2223 (Apr 18 reaction low). Initial resistance is now located at 1.2397 (Apr 19 high) followed by 1.2412 (38.2% retracement of the 1.3668 the 1.1638 decline).

• Yen 117.60

Initial support is located at 116.68 (Apr 5 corrective low) followed by 116.25 (Mar 27 low). Initial resistance is now at 118.23 (Apr 18 reaction high) followed by 118.90 (Apr 11 high).

• Pound – 1.7790

Initial support at 1.7679 (Apr 18 reaction low) followed by 1.7522 (Apr 17 low). Initial resistance is now at 1.7937 (Jan 25 high &amp Apr 19 high) followed by 1.7946 (61.8% retracement of the 1.8501 to 1.7048 decline).

• Aussie – 0.7380

Initial support at 0.7345 (Apr 12 high) followed by 0.7270 (Apr 17 low). Initial resistance is now at 0.7488 (Mar 2 reaction high) followed by 0.7502 (13 – month trendline resistance).