Australian FOREX Daily Outlook 19/11/2009

Gold Trades above $1150

CURRENCY TRADING SUMMARY – 19th November (00:30GMT)

U.S. Dollar Trading (USD) eased for most of the day as the recent strength proved temporary and US stocks remained well supported near highs. Fed Speaker Bullard did little to help the USD with his comments that US rates may stay low until 2012. October CPI at 0.3% vs. 0.2% forecast. October Housing starts -10.6% vs. 1.9% previously. In US Stocks, DJIA -11 points closing at 10426, S&amp P -1 points closing at 1109 and NASDAQ +10 points closing at 2193. Looking ahead, Weekly Jobless Claims forecast at 505k vs. 502k previously. Also released, November Philly Fed forecast at 12 vs. 11.5 previously.

The Euro (EUR) was once again very strong as USD strength subsided and constant buying kept the single currency in demand. Good rallies in the EUR/JPY and EUR/GBP also provided solid support. September Current Account came in at -5.4bn vs. 0.6bn previously. Overall the EUR/USD traded with a low of 1.4868 and a high of 1.4992 before closing at 1.4965.

The Japanese Yen (JPY) was a mixed bag as USD/JPY managed small gains but GBP/JPY and AUD/JPY remained on the back foot. Risk appetite is still strong but most pairs are sticking to well know ranges whilst the USD/JPY remains very quiet. Overall the USDJPY traded with a low of 88.99 and a high of 89.51 before closing the day around 89.40 in the New York session.

The Sterling (GBP) was sold aggressively against the EURO and USD as the MPC minutes showed a split in the vote of how much the QE asset purchase program should be extended. MPC Member Miles called for a greater amount of 40bn vs. the 25bn Pounds eventually agreed too. Overall the GBP/USD traded with a low of 1.6712 and a high of 1.6849 before closing the day at 1.6745 in the New York session. Looking ahead, October Retail Sales forecast at 0.5% vs. 0.0% previously.

The Australian Dollar (AUD) rallied on the back of Euro’s and Golds gains but was capped by weaker US stocks. The pair is consolidating gains as the market takes a breath from the relentless rallying over the past 2 weeks. Most AUD crosses have been treading water as fresh buying is being offset from profit taking. Overall the AUD/USD traded with a low of 0.9264 and a high of 0.9340 before closing the US session at 0.9295. Looking ahead, RBA Assistant Governor Debelle Speaks.

Oil &amp Gold (XAU) traded at fresh year highs above $1150 before settling on profit taking. Overall trading with a low of USD$1135 and high of USD$1153 before ending the New York session at USD$1145 an ounce. Oil was higher on a drop in US crude Inventories. Crude Oil was up $0.40 ending the New York session at $79.50.

TECHNICAL COMMENTARY

Euro – 1.4950

Initial support at 1.4808 (Nov 17 low) followed by 1.4786 (0.618 of 1.4624-1.5049). Initial resistance is now located at 1.5016 (Nov 16 high) followed by 1.5048 (Nov 11 high)

Yen – 89.45

Initial support is located at 88.36 (Oct 9 low) followed by 88.00 (Big Figure). Initial resistance is now at 89.75 (Nov 16 high) followed by 90.60 (Nov 16 high).

Pound – 1.6725

Initial support at 1.6670 (Nov 16 low) followed by 1.6572 (Nov 13 low). Initial resistance is now at 1.6878 (Nov 16 high) followed by 1.7043 (Aug 5 high).

Australian Dollar – 0.9290

Initial support at 0.9237 (Nov 17 low) followed by the 0.9211 (Nov 12 low). Initial resistance is now at 0.9406 (Nov 16 high) followed by 0.9476 (Jul 31 ’08 high).

Gold – 1143

Initial support at 1127 (Nov 17 low) followed by 1118 (Nov 16 high). Initial resistance is now at 1150 (Key Level) followed by 1165 (1.618 of 985 – 1070.80 from 1026.60).

Oil – 79.60

Initial support at 78.00 (Intraday support) followed by 76 (Intraday support). Initial resistance is now at 80 (key level) followed by 82 (October high).