Australian FOREX Daily Outlook 11/12/2009

AUD and NZD lead Recovery

CURRENCY TRADING SUMMARY – 11th December (00:30GMT)

U.S. Dollar Trading (USD) was a relatively quiet trading day with most the majors staying within the range of the previous day tracking movements in stock markets. US equities finished on a positive note as jobs numbers continue to improve. Weekly Jobless Claims forecast at 474k vs. 457k previously were not that impressive but Continuous Claims dropped to 5.15m vs. 5.44m forecast. DJIA +68 points closing at 10405, S&amp P +6 points closing at 1102 and NASDAQ +7 points closing at 2190. Looking ahead, November Retail Sales forecast at 0.7% vs. 1.4% previously.

The Euro (EUR) stayed within a 80 pip range for the whole day with improving risk being countered by concerns about some EU states and talk that the US economy will outpace the Eurozone during the recovery. Swiss held their rates at 0.25% and EUR/CHF was very quiet around the 1.5100 figure. Overall the EUR/USD traded with a low of 1.4682 and a high of 1.4762 before closing at 1.4730. Looking ahead, ECB President Trichet speaks.

The Japanese Yen (JPY) strong US data sales helped the USD/JPY gain a solid footing above the 88 Yen level in quiet trade. The market is very mixed on the outlook of the Yen although a median forecast of Bloomberg analysts for 2010 was for an average price at 98. Overall the USDJPY traded with a low of 87.72 and a high of 88.48 before closing the day around 88.25 in the New York session. Looking ahead, Chinese Trade Balance forecast at 24Bn in November.

The Sterling (GBP) the BOE proved a non event and the GBP/USD stayed within a contained range. Rates were held at 0.5% and the Asset purchase program was capped at 200bn as forecast. GPD/AUD was a major mover to the downside as the new theme of selective risk helped the higher yielder. Overall the GBP/USD traded with a low of 1.6213 and a high of 1.6350 before closing the day at 1.6270 in the New York session. Looking ahead, November PPI output forecast at 0.3% vs. 0.2% previously.

The Australian Dollar (AUD) was pushed higher after the November Unemployment report stunned the market. November Employment change was +31k vs. +5k forecast and the Unemployment Rate was 5.7% vs. 5.9% forecast. The only pair to outpace the Aussie was its neighbour the NZD which received a boost from a relatively hawkish monetary policy statement after their RBNZ meeting yesterday. Overall the AUD/USD traded with a low of 0.9089 and a high of 0.9193 before closing the US session at 0.9170.

Oil &amp Gold (XAU) consolidated recent losses in a tight range but finished on a firmer footing. Overall trading with a low of USD$1120 and high of USD$1137 before ending the New York session at USD$1131 an ounce. Crude Oil found Support under $70 a barrel but it still quite sluggish as oversupply fears mount. Crude Oil was down -$0.13 ending the New York session at $70.54.

TECHNICAL COMMENTARY

Euro – 1.4735

Initial support at 1.4668 (Dec 9 low) followed by 1.4626 (Nov 3 low). Initial resistance is now located at 1.4768 (Dec 9 high) followed by 1.4905 (Dec 7 high)

Yen – 88.30

Initial support is located at 87.37 (Dec 9 low) followed by 86.59 (Dec 2 low). Initial resistance is now at 88.69 (Dec 9 high) followed by 89.52 (Dec 8 High).

Pound – 1.6280

Initial support at 1.6168 (Dec 9 low) followed by 1.6126 (Sept 30 low). Initial resistance is now at 1.6375 (Dec 10 high ) followed by 1.6516 (Dec 7 high).

Australian Dollar – 0.9170

Initial support at 0.9016 (Dec 9 low) followed by the 0.8947 (Nov 27 low). Initial resistance is now at 0.9322 (Dec 3 high) followed by 0.9406 (Nov 16 high).

Gold – 1130

Initial support at 1116 (Dec 8 low) followed by 1101 (Nov 13 low). Initial resistance is now at 1147 (Dec 9 high) followed by 1169 (Dec 08 high) .

Oil – 70.60

Initial support at 70.00 (Major level) followed by 69.50 (Intraday support). Initial resistance is now at 72.50 (intraday resistance) followed by 75 (intraday resistance).