Australian FOREX Daily Oulook 14/11/2005

MARKET SUMMARY – 14/11/05(03.00GMT)

• The Dollar traded lower against the major currencies in thin London and New York sessions on Friday. This was due to Veterans Day, which had most of the markets closed in the States. With no economic data to provide direction, dealers chose to book some profits which led to the mild weakness in the dollar. The US stock market rose to a three and a half month high, buoyed by lower oil prices and positive news by motor industry giant, General Motors. Crude oil futures fell for the fifth time in six sessions on Friday, in response to higher supplies. There are no major economic releases scheduled in the States for today.

• The Euro traded up from a two year low of 1.1683 to close the New York session near its daily highs of 1.1732. With no economic data out, Euro was supported by profit taking ahead of the weekend in a quiet Trading. There are no major economic releases scheduled in the Eurozone for today.
  

• The Japanese yen traded between JPY117.63 to 118.17 per US dollar before ending the New York session near JPY117.85. Earlier today, Japan‘s current account surplus rose in September as imports slowed and exports accelerated, supporting growth in the world’s second-largest economy. The current account surplus increased 6.5 percent to 1.86 trillion yen ($15.8 billion) compared with the same month a year ago. The median forecast was for the surplus to narrow to 1.65 trillion yen from 1.74 trillion yen.
  

• The Pound held steady at US$1.7400 levels as investors waited on the sidelines for more economic data next week and clues on the UK interest rate outlook. The Pound hovered near a 4-month high against the Euro and the Bank of England will release its quarterly inflation report containing its latest growth and inflation forecasts on Wednesday. There are no major economic releases scheduled in the UK for today.
  

• The Aussie dollar rose from 0.7298 and closed near its New York session highs of 0.7330. There does seem to be some underlying support for Aussie due to continued strength in the resource sector. On Friday Copper reached a new high and Aluminum prices were at 10 year highs and Zinc prices at 8 year highs. There are no major economic releases scheduled in the Australia for today.

TECHNICAL COMMENTARY

• Euro – 1.1760

  Euro needs to trade back above 1.1799 in order to relieve the immediate bear threat. However, only a close above 1.1871 would confirm a possible low in place. Below 1.1670 would expose further slippage towards 1.1586, the 38.2% retracement of the 0.8227 to 1.3663 Oct ’00 to Dec ’04 advance.

• Yen – 117.95

USD/JPY continues to consolidate between 117.00 and 118.20. However sentiment remains positive with a possible retest of 118.43, with a break of this level seen as the catalyst for an extension towards the psychological 120 level (and area of Aug 19, 2003 peak at 119.83).

• Pound – 1.7445

Minor resistance is located at 1.7519, with more important resistance located at 1.7683 (the 61.8% retracement of the 1.7904 to 1.7326 decline). Initial support is located at Oct 12’s 1.7391 low with major support at the years low of 1.7271.

• Aussie – 0.7325

Aussie rejected the 0.7375 resistance level (previous support &amp low for the year). However for renewed weakness a break of 0.7284 is required to signal a broader decline towards 0.7238, the 61.8% retracement of the 0.6773 to 0.7590 advance. Topside resistance is located at 0.7375, followed by 0.7420.