Australian FOREX Daily Outlook 24/06/2010

US Interest Rates on Hold

CURRENCY TRADING SUMMARY – 24th June (00:30 GMT)

U.S. Dollar Trading (USD) in an eventful day of trading the USD finished on a weak footing after finding strength earlier in the day on safe haven demand. May Home Sales surprised to the downside at 300k vs. 410k forecast. The FOMC held rates at 0.25% and slightly downgraded the economic outlook citing the weak housing data and European crisis. In US stocks, DJIA +4 points closing at 10446, S&amp P -3 points closing at 1092 and NASDAQ -7 points closing at 2254. Looking ahead, Weekly Jobless Claims are forecast at 460k vs. 472k previously.

The Euro (EUR) traded at day lows after the US housing data disappointed and EUR/JPY fell briefly below Y110. June Services PMI fell to 55.4 vs. 56.2 previously whilst Manufacturing PMI fell to 55.6 vs. 55.8 previously. Dollar weakness after the FOMC decision to leave rates low for an extended period of time helped propel the Euro to day highs above 1.2300. EUR/USD traded with a low of 1.2208 and a high of 1.2345 before closing at 1.2320. Looking ahead, April Industrial Orders are forecast at 1.6% vs. 5.2% previously.

The Japanese Yen (JPY) found strength against the major with Y90 broken on the downside but there little follow through as crosses found support and lifted into the US close. Japanese Investor reaction will be key with comments from the new PM and Financial Minister closely scrutinized. Overall the USDJPY traded with a low of 89.71 and a high of 90.59 before closing the day around 89.90 in the New York session.

The Sterling (GBP) pressed higher as the Pound gained favor still glowing in the austerity measures announced in Tuesday’s budget. Also helping, the MPC minutes revealing that Junes vote at 7-1 included a member calling for a rate hike. Overall the GBP/USD traded with a low of 1.4802 and a high of 1.4977 before closing the day at 1.4950 in the New York session.

The Australian Dollar (AUD) was very volatile bucking the weakness in other risk currencies as rumors swept the market that the PM Rudd will be replaced in a leadership contest. The market is still unsure as to the mining tax proposed and a new leader may reconsider. Overall the AUD/USD traded with a low of 0.8659 and a high of 0.8784 before closing the US session at 0.8784. Update New Australian PM Glillard after Rudd Quits.

Oil &amp Gold (XAU) suffered a sharp drop in New York as Oil slumped. Overall trading with a low of USD$1224 and high of USD$1246 before ending the New York session at USD$1236 an ounce. Oil fell near $2 a barrel when weekly inventory numbers came in much higher then expected with a build of 2M barrels. WTI Oil Closed -$1.50 at $76.35 a barrel.

TECHNICAL COMMENTARY

Euro – 1.2335

Initial support at 1.2209 (June 23 low) followed by 1.2045 (June 11 low). Initial resistance is now located at 1.2487 (June 21 high) followed by 1.2672 (May 21 high)

Yen – 89.90

Initial support is located at 89.74 (June 23 low) followed by 88.97 (May 20 low). Initial resistance is now at 91.48 (June 21 high) followed by 92.12 (June 14 high).

Pound – 1.4990

Initial support at 1.4646 (Jun 17 low) followed by 1.4505 (Jun 11 low). Initial resistance is now at 1.5054 (May 10 high) followed by 1.5219 (76.4% 0f 1.5524-1.4231).

Australian Dollar – 0.8745

Initial support at 0.8582 (June 16 low) followed by the 0.8506 (June 15 low). Initial resistance is now at 0. 8865 (May 17 high) followed by 0.9027 (May 17 high).

Gold – 1235

Initial support at 1224 (June 23 low) followed by 1215 (June 10 low). Initial resistance is now at 1265 (June 21 high) followed by 1300 (Round Number).

Oil – 76.20

Initial support at 75.00 (Intraday Support) followed by 72.50 (Intraday Support). Initial resistance is now at 78.00 (Intraday Resistance) followed by 80.00 (Intraday Resistance).