Australian FOREX Daily Outlook 08/05/2007

Major’s trade on technical’s as little data is released to move currencies. Aussie Retail Sales to be released today.

CURRENCY TRADING SUMMARY –08 MAY 07 (23:30GMT)

• U.S. Dollar Trading (USD) eased on Monday ahead of the FOMC rate decision later this week, underlining the expectations for U.S. interest rates to fall this year as rates in other major economies climb higher. While the Federal Reserve is seen holding rates at 5.25% after its meeting on Wednesday, analysts say officials may concede signs of slower U.S. growth after recent data revealed lackluster job growth in April. In U.S. share markets, the NASDAQ fell by 1.2 points (-0.04%) whilst the Dow Jones climbed by 48.35 points (+0.36%). Crude Oil fell by US$0.84 to US$61.90 a barrel.
  
• The Euro (EUR) remained steady on Monday ahead of the ECB rate decision on Thursday where it is expected to keep rates on hold having signaled a hike in June. Overall the EUR held between a low of 1.3591 and a high of 1.3628 before closing the day at 1.3603. Looking ahead, German Industrial Production for the month of March is scheduled for release (Forecast: 0.0%, Previous: 0.9%). In other news leading up to the ECB announcement, President Trichet is scheduled to speak later on today, as markets are sure pay attention to any indication on future policies.
  

• The Japanese Yen (JPY) gained almost 0.2% versus the USD trading on the back of other majors. Overall the JPY traded with a range of a low 119.79 and a high of 120.21 before closing the day at 120.08 in the New York session.
  

• The Sterling (GBP) saw thin trading as a result of a public holiday in the UK. GBP traded in a narrow range of a low 1.9932 and a high of 1.9974 before closing the day at 1.9933 in the New York session.
  

• The Australian Dollar (AUD) also traded in a very much range bound due little economic data release. Overall the AUD traded with a low of 0.8210 and a high of 0.8251 before closing the day at 0.8246 in the New York session. Looking ahead, Retail Sales is made public with the expectations surrounding a figure of 0.5% (Previous: 0.9%)
  

• The Turkish Lira (TRY) financial markets closed mixed today in steady trade as stocks fell while the Lira made a strong advance with investors calling for early elections, in the hope the political environment will stable.
  
• Gold (XAU) traded in a narrow range today rising by US$0.70 an ounce to US$690.40.

TECHNICAL COMMENTARY

• Euro 1.3600

Initial support at 1.3534 (May 4 low) followed by 1.3490 (23.6% retracement of the 1.2865 to 1.3683 advance). Initial resistance is now located at 1.3629 (May 7 high) followed by 1.3683 (Apr 27 trend high)

• Yen 120.10

Initial support is located at 119.50 (May 2 low) followed by 119.06 (May 1 low). Initial resistance is now at 120.54 (76.4% retracement of the 122.20 to 115.15 decline) followed by 121.65 (Feb 22 reaction high).

• Pound – 1.9930

Initial support at 1.9843 (May 4 low) followed by 1.9823 (Former resistance from Apr 3) Initial resistance is now at 2.0002 (May 5 high) followed by 2.0076 (May 1 high)

• Australian Dollar – 0.8250

Initial support a 0.8170 (May 4 low) followed by 0.8150 (Apr 9 low). Initial resistance is now at 0.8270 (May 4 high) followed by 0.8315 (Trendline resistance)

• Gold – 687.70

Initial support at 680.40 (May 4 low) followed by 667.80 (May 2 low). Initial resistance is now at 691.05 (May 7 high) followed by 693.80 (Apr 23 high)