Australian FOREX Weekly Outlook 30/03/2009

Stock Markets rally around the world

30/03/09

last week’s currency trading review

The Dollar managed to gain even as risk sentiment improved with the majors giving up some of last weeks large up moves. The Major news that swept the markets was Treasury Secretary Geithner’s Toxic partnership plan that led to a 5% rally in Dow Jones. Also helping sentiment was the rebound in housing data with new and existing home both jumping over 5% last month. Of concern late in the week worries about GM and Chrysler’s viability led to a sharp stock pullback. The Euro gave up some gains from the previous week as the market looks to the ECB and its next move whether it be to cut rates or begin its own Quantitative Easing program. Helping cement this view was the continued weak IFO Business climate remaining low at 82.1. The EUR/USD fell -2.21 % closing at 1.3284, after opening the week at 1.3578. The Japanese Yen took advantage of the increase in investor confidence with crosses following the lead of USD/JPY which once again marched towards the key 100 level. The USD/JPY gained 1.96% closing at 97.85 after opening at 95.93. The GBP held up relatively well with the market surprised by the CPI reading above 3% prompting a letter from the Bank of England to the Government. Weak data late in the weak hurt Pound Sentiment though with retail sales falling -1.9%. The GBP/USD fell -1.01% closing at 1.4317 after opening at 1.4462. The AUD shrugged off the Euro weakness with AUD/JPY buying keeping the pair well supported as it tested 0.7000. The AUD/USD closed up 1.05% at 0.6938 after opening at 0.6866.

The forex trading week preview

G20 Meeting Begins

In the States On Wednesday we have ISM Manufacturing is forecast at 36 vs. 35.8 previously. Also released ADP Employment report forecast at -649K vs. -697K. On Thursday, Weekly Jobless Claims are forecast at 650K vs. 652K previously. Factory Orders (Feb) are forecast at 1.2% vs. -1.9% previously. On Friday we have Non Farm Payrolls (Mar) forecast at -660K vs. -651K previously. The Unemployment rate is forecast at to rise to 8.5% vs. 8.1% previously. Finally the ISM non-manufacturing (Mar) is forecast at 42.0 vs. 41.6 previously. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone On Wednesday we have German Retail Sales forecast at 0.2% vs. -0.6% previously along with EU Unemployment forecast at 8,3% vs. 8,2% previously. On Thursday the ECB meet and are forecast to cut from 1.5% to 1.0%. In the UK On Wednesday PMI Manufacturing is forecast at 35.0 vs. 34.7 previously. On Friday, PMI Services are forecast at 43.5 vs. 43.2 previously. We will provide our previews and reviews of these data releases in the daily summary.

In Japan On Wednesday Q1 Tankan Survey is forecast at -55 vs. -24 previously. We will provide our previews and reviews of these data releases in the daily summary.

In Australia On Wednesday Retail Sales (Feb) forecast at 0.5% vs. 0.2% previously. On Thursday we have (Feb) Trade Balance forecast at 700m vs. 970m previously. We will provide our previews and reviews of these data releases in the daily summary.

·Euro – 1.3285

Initial support at 1.3257 (Mar 27 low) followed by 1.3349 (38.2% retrace 1.2457 to 1.3739). Initial resistance is now located at 1.3592 (Mar 27 high) at followed by 1.3678 (Mar 24 high)

·Yen – 98.20

Initial support is located at 96.92 (Mar 25 low) followed by 95.43 (Mar 23 low). Initial resistance is now at 98.97 (Mar 17 high) followed by 99.68 (Mar 5 high).

·Pound – 1.4295

Initial support at 1.4268 (Mar 27 low) followed by 1.4160 (Mar 19 low). Initial resistance is now at 1.4494 (Mar 27 high) followed by 1.4638 (Mar 26 high).

·Australian Dollar – 0.6930

Initial support at 0.6904 (Mar 25 low) followed by the 0.6852 (Mar 20 low). Initial resistance is now at 0.7094 (Mar 24 high) followed by 0.7142 (Jan 8 high).

·Gold – 925

Initial support at 917 (Mar 25 low) followed by 883 (Mar 18 low). Initial resistance is now at 936 (Mar 27 high) followed by 945 (Mar 26 high).