Australian FOREX Daily Outlook 02/04/2010

Non Farm Payrolls in Holiday Market

CURRENCY TRADING SUMMARY – 2nd April (00:30GMT)

U.S. Dollar Trading (USD) continued to find sellers as the market sold the safe haven currency in favor of riskier investments. Economic data is steadily improving with weekly jobless claims falling to 439k vs. 445k previously and March ISM Manufacturing jumping to 59.6 vs. 56.5 previously. In US stocks, DJIA +70 points closing at 10927, S&amp P +8 points closing at 1178 and NASDAQ +4 points closing at 2402. Looking ahead, March Non Farm Payrolls forecast at 190k vs. -36k previously. The Unemployment rate is forecast to stay at 9.7%.

The Euro (EUR) the rally continued for a second day as traders were optimistic that the global recovery including Europe was on track. EUR/JPY tracked above Y127 for the first time since January 28^th. German Retail Sales were weaker than expected at -0.4% vs. -0.1% forecast m/m. Overall the EUR/USD traded with a low of 1.3459 and a high of 1.3593 before closing at 1.3585. Looking ahead, Easter Bank Holiday.

The Japanese Yen (JPY) the market pushed the USD/JPY to fresh multimonth highs just above Y94 ahead of the very important US job figures today. Q1 TANKAN Survey at -14 vs. -13 forecast and -24 previously. Most crosses extended there respective rallies except for CHF/JPY which was lower on intervention by the Swiss central bank. Overall the USDJPY traded with a low of 93.26 and a high of 94.08 before closing the day around 92.85 in the New York session.

The Sterling (GBP) tracked the Euro higher on general risk appetite to test 1.5300. GBP/JPY traded above Y143 for the first time since Feb 17 and is turning aggressively bullish as the trade gains momentum. EUR/GBP traded briefly below 0.8880 but failed to follow through. Overall the GBP/USD traded with a low of 1.5179 and a high of 1.5301 before closing the day at 1.5270 in the New York session.

The Australian Dollar (AUD) Regained the 0.9200 level as Oil and Gold rallied heavily and risk appetite helped the high yielding currency. AUD/NZD reclaimed the 1.3000 level after an IMF report put the NZD as overvalued by 10-15%. February Trade Balance forecast at -1924mn vs. -1300 forecast. Overall the AUD/USD traded with a low of 0.9153 and a high of 0.9219 before closing the US session at 0.9195.

Oil &amp Gold (XAU) broke higher above resistance at $1119 to trade in the $1120’s. Overall trading with a low of USD$1111 and high of USD$1128 before ending the New York session at USD$1126 an ounce. Staged another impressive rally to break and close for the week above $85 a barrel. Crude Oil was up +$1.39 ending the New York session at $83.76.

TECHNICAL COMMENTARY

Euro – 1.3575

Initial support at 1.3270 (March 26 low) followed by 1.3247 (May 6 low). Initial resistance is now located at 1.3591 (April 1 high) followed by 1.3608 (0.618 of 1.3818-1.3268)

Yen – 93.80

Initial support is located at 91.77 (Mar 25 low) followed by 91.09 (Mar 24 low). Initial resistance is now at 94.64 (Aug 25 high) followed by 95.1 (0.618 of 101.44-84.83).

Pound – 1.5270

Initial support at 1.4975 (Mar 30 low) followed by 1.4784 (Ma low). Initial resistance is now at 1.5327 (Mar 31 high) followed by 1.5382 (Mar 19 high).

Australian Dollar – 0.9200

Initial support at 0.8978 (Mar 4 low) followed by the 0.8936 (Mar 1 low). Initial resistance is now at 0.9216 (Mar 30 high) followed by 0.9250 (March 17 high).

Gold – 1125

Initial support at 1085 (Mar 24 low) followed by 1078 (Feb 12 low). Initial resistance is now at 1118 (Mar 31 high) followed by 1133 (Mar 17 high).

Oil – 85.20

Initial support at 85.00 (Intraday Support) followed by 83.80 (Intraday Support). Initial resistance is now at 86.00 (March high) followed by 88.00 (Intraday Resistance).