Australian FOREX Daily Outlook 21/04/2010

Canadian Dollar gets boost from Bank of Canada

CURRENCY TRADING SUMMARY – 21st April (00:30GMT)

U.S. Dollar Trading (USD) was mixed gaining against the two biggest currencies in the Euro and Yen but lost ground against nearly all others as the market remained in ‘risk on’ mood. The big move was seen in the CAD after the BOC meeting in which although there was no change in the base rate at 0.25% the central bank did upgrade the economic outlook and hinted at imminent hikes. In US stocks, DJIA +25 points closing at 11117, S&amp P +9 points closing at 1207 and NASDAQ +20 points closing at 2500. Looking ahead, Weekly Crude Inventory data forecast at 0.1mn vs. -2.2mn previously.

The Euro (EUR) edged above 1.3500 on a solid April ZEW survey at 53 vs. 45.2 previously. Also helping the pair remain supported was the successful Greece bond auction. Later the market was heavy the market focused on 80bn Total Greece comment from Weber. Overall the EUR/USD traded with a low of 1.3418 and a high of 1.3525 before closing at 1.3430. Looking ahead, ongoing Greece IMF/EU Aid meeting.

The Japanese Yen (JPY) was the weakest currency in the market as Yen crosses became the favored way to express risk appetite and USD/JPY surged through Y93. The market is beginning to focus on the widening gap between Japan’s loose monetary policy and that of the rest of the world especially as the Central Bank of India raised rates. Overall the USDJPY traded with a low of 92.45 and a high of 93.45 before closing the day around 93.20 in the New York session.

The Sterling (GBP) strong economic data push the market above 1.5400 in the European session before USD strength later saw gains pared back. March CPI was 3.4% vs. 3.2%y/y and March RPI was at 4.4% vs. 4.1% forecast. GBP/JPY soared up above Y143 after being below Y140 on Monday. Overall the GBP/USD traded with a low of 1.5288 and a high of 1.5437 before closing the day at 1.5360 in the New York session. Looking ahead, April MPC meeting minutes.

The Australian Dollar (AUD) was well supported from hawkish RBA minutes which justified the April Rate rise by noting the mining boom as potentially causing inflation down the road. The market pushed through 0.9300 in US session on further strength in commodities and stocks. Overall the AUD/USD traded with a low of 0.9244 and a high of 0.9328 before closing the US session at 0.9310.

Oil &amp Gold (XAU) pushed higher tracking Oil and investor appetite. Overall trading with a low of USD$1134 and high of USD$1146 before ending the New York session at USD$1140 an ounce. Crude Oil was very well supported on Global recovery demand. WTI Oil Closed +$2.00 at $83.45 a barrel.

TECHNICAL COMMENTARY

Euro – 1.3420

Initial support at 1.3343 (Apr 9 high) followed by 1.3270 (Mar 25 low). Initial resistance is now located at 1.3692 (Apr 12 high) followed by 1.3816 (Mar 17 high)

Yen – 93.20

Initial support is located at 91.46 (0.500 of 88.14-94.79) followed by 90.66 (61.8% retracement of 88.13 – 94.77). Initial resistance is now at 93.77 (Apr 9 high) followed by 94.27 (Apr 7 High).

Pound – 1.5360

Initial support at 1.5130 (Apr 6 low) followed by 1.5044 (Mar 31 low). Initial resistance is now at 1.5522 (Apr 15 low) followed by 1.5688 (Feb 18 low).

Australian Dollar – 0.9315

Initial support at 0.9131 (Mar 31 low) followed by the 0.9035 (Mar 29 low). Initial resistance is now at 0.9364 (Apr 15 high) followed by 0.9406 (Nov 16 high).

Gold – 1141

Initial support at 1123 (Apr 19 low) followed by 1122 (Apr 7 low). Initial resistance is now at 1164 (April 12 high) followed by 1183 (0.764 of 1126.56-1044.85).

Oil – 84.25

Initial support at 82.50 (Intraday Support) followed by 80.00 (Intraday Support). Initial resistance is now at 85.00 (March high) followed by 86.00 (Intraday Resistance).