Australian FOREX Daily Outlook 13/03/2008

Euro traded at a record high versus the dollar as views the Fed injection will not suffice.

CURRENCY TRADING SUMMARY – 13 MARCH 2008 (00:30GMT)

·U.S. Dollar Trading (USD) was weaker across the board versus a number of majors trading at record lows once again. Many of the moves were on views from Citigroup Inc. to Goldman Sachs Group Inc. which expect the Federal Reserve’s plan to inject $200 billion into the banking system may fail to break the freeze in money-market lending. In U.S. share markets the NASDAQ was down -61.45 points (-0.69%) whilst the Dow Jones was also lower by -46.57 points (-0.38%). Crude oil traded once again at a record high US$109.92 a barrel up by US$1.17 points. Core Retail Sales is the key piece of data out of the U.S. on Thursday.

·The Euro (EUR) traded at a record high of 1.5559 as views the recent liquidity injection by the Fed will do little to stabilize markets. Overall the EURUSD traded with a low of 1.5333 and a high of 1.5559 before closing the day at 1.5558 in the New York session.

·The Japanese Yen (JPY) came under pressure during the Asian session on rebounding stock prices. Overall the USDJPY traded with a low of 101.67 and a high of 103.52 before closing the day at 1017.69 in the New York session.

·The Sterling (GBP) moved higher versus the U.S. dollar on Wednesday largely on the back of a weaker dollar. Overall the GBPUSD traded with a low of 2.0076 and a high of 2.0254 before closing the day at 2.0274 in the New York session.

·The Australian Dollar (AUD) edged higher on rebounding stock prices and higher commodity prices. Overall the AUDUSD traded with a low of 0.9277 and a high of 0.9367 before closing the day at 0.9329 in the New York session. On Thursday morning, Unemployment Rate dropped to an all time low of 4.0% for the month February buoyed by 37.6K jobs created pushing the AUD towards 94 cents.

·Gold (XAU) rose as the dollar fell to a record against the Euro Gold has gained 17 percent this year. XAU traded with a low of 968.10 and a high of 981.90

TECHNICAL COMMENTARY

·Euro – 1.5525

Initial support at 1.5283 (Mar 11 low) followed by 1.5262 (Mar 6 low). Initial resistance is now located at 1.5571 (Mar 12 high) followed by 1.5666 (bull channel resistance).

·Yen – 101.70

Initial support is located at 101.42 (Mar 7 low) followed by 101.26 (Nov 1999 low). Initial resistance is now at 103.59 (Mar 11 high) followed by 104.19 (Jan 23 high)

·Pound – 2.0255

Initial support at 1.9996 (Mar 11 high) followed by 1.9975 (Feb 27 resistance). Initial resistance is now at 2.0281 (Mar 12 high) followed by 2.0328 (Bull channel top)

·Australian Dollar – 0.9380

Initial support a 0.9147 (Mar 11 low) followed by 0.9122 (38.2% retracement of the 0.8513 to 0.9499 advance). Initial resistance is now at 0.9400 (round number resistance) followed by 0.9421 (Mar 3 high)

·Gold – 984.80

Initial support at 957.20 (Mar 4 low) followed by 949.00 (Feb 27 low). Initial resistance is now at 992.75 (Mar 5 high) followed by 1000.00 (Round Number)