Australian FOREX Daily Outlook 25/11/2009

US Federal Reserve in No Rush

CURRENCY TRADING SUMMARY – 25th November (00:30GMT)

U.S. Dollar Trading (USD) had a mixed day with strength in Asia being reversed in the US session with stocks once again bouncing off lows and FOMC minutes showing the FED is in no rush to raise raise while raising GDP predictions for 2009. September Case Shiller HPI was at 0.3% vs. 0.8% forecast. Q3 GDP was revised to 2.8% vs. 3.5% initially. In US Stocks, DJIA -17 points closing at 10433, S&amp P -1 points closing at 1105 and NASDAQ -7 points closing at 2169. Looking ahead, October Core PCE is forecast at 0.1% and November Michigan Confidence Survey forecast at 67 vs. 70.6 previously. Also released Weekly Oil Inventories forecast at 1.2mln vs. -0.9mln previously.

The Euro (EUR) tested 1.4900 as the start of Europe but with little follow through the pair reversed direction and once gain targeted the key 1.5000 level. EUR/JPY found support at 132 Yen and EUR/GBP pounced on GBP weakness to test 0.9050. Helping the Euro rally was the November German IFO at 93.9 vs. 92.5 previously. Overall the EUR/USD traded with a low of 1.4887 and a high of 1.4990 before closing at 1.4965.

The Japanese Yen (JPY) Fresh month lows were hit on continued USD weakness in a slightly risk adverse climate yesterday. With Crosses also under pressure there is little helping the slow downtrend of most pairs. AUD/JPY found support at 81 Yen again and GBP/JPY in the low 146 region. Overall the USDJPY traded with a low of 88.33 and a high of 88.97 before closing the day around 88.55 in the New York session. Looking ahead, October Exports forecast at -26.5% vs. -30.7% previously y/y.

The Sterling (GBP) tested 1.6500 in Europe but with little new from Governor King’s speech the pair rallied off lows with the Euro. The pair struggled near 1.6600 as the sell on rally mentality continues to hurt the GBP. Overall the GBP/USD traded with a low of 1.6495 and a high of 1.6610 before closing the day at 1.6580 in the New York session. Looking ahead, Q3 GDP forecast at -0.3% vs. -0.4% initial reading.

The Australian Dollar (AUD) floundered in risk aversion during the Asian and European session before strength in Gold allowed a modest bounce. Sentiment towards the AUD has changed recently with stale longs using rallies as chances to book profits and weak risk appetite is translating into a sluggish AUD/JPY. Overall the AUD/USD traded with a low of 0.9130 and a high of 0.9235 before closing the US session at 0.9190. Looking ahead, RBA Deputy Governor Battellino Speaks.

Oil &amp Gold (XAU) once again was supported on dips towards the $1160 level but found resistance near $1170 strong as well. Overall trading with a low of USD$1157 and high of USD$1172 before ending the New York session at USD$1169 an ounce. Was weak on concerns of plentiful supply. Crude Oil was down -$1.11 ending the New York session at $76.45.

TECHNICAL COMMENTARY

Euro – 1.4960

Initial support at 1.4833 (Nov 23 low) followed by 1.4802 (Nov 20 low). Initial resistance is now located at 1.4999 (Nov 23 high) followed by 1.5048 (Nov 11 high)

Yen – 88.50

Initial support is located at 88.36 (Oct 9 low) followed by 88.01 (Oct 7 low). Initial resistance is now at 89.19 (Nov 23 high) followed by 89.75 (Nov 16 high).

Pound – 1.6580

Initial support at 1.6461 (Nov 20 low) followed by 1.6402 (Nov 4 low). Initial resistance is now at 1.6676 (Nov 20 high) followed by 1.6750 (Nov 19 high).

Australian Dollar – 0.9195

Initial support at 0.9061 (Nov 20 low) followed by the 0.8971 (Nov 4 low). Initial resistance is now at 0.9277 (Nov 23 high) followed by 0.9337 (Nov 18 high).

Gold – 1169

Initial support at 1153 (Nov 23 low) followed by 1132 (Nov 20 high). Initial resistance is now at 1174 (Nov 23 high) followed by 1177 (1.764 of 985 – 1070.80 from 1026.60).

Oil – 75.80

Initial support at 75.60 (Intraday support) followed by 75.00 (Intraday support). Initial resistance is now at 77.60 (intraday resistance) followed by 78 (intraday resistance).