Australian FOREX Daily Outlook 09/06/2005

09/06/05 (02:00 GMT)

• Dollar rallied mostly against European currencies due to technical factors and upside surprise in the data outcome. Wholesale Sales had its largest gain in 13 months while Inventories jumped higher which is likely to lead to the upward revision of Q1 GDP figures. The market also awaits Greenspan’s testimony (14:00 GMT) about the economy and would be all ears for any clues in regards to future monetary policy and growth outlook.
  

• Euro fell sharply after it encountered the strong resistance mark at 1.2355 which held large selling orders. Earlier uncertainty surrounding the U.S. interest rates helped it rally higher also lack of any Euro-Zone data, releases which have been on the weak side since start of the year, also minimized reasons to sell it in the European session. Bottom pickers have helped it stay above 1.22 for now, with focus on Greenspan’s speech.

• Yen went back above the 107 mark on the general rebound by the Dollar while the Leading Economic and Coincident index remained in contraction territory. This weekend’s G7 summit is also not expected to throw any new light on the Yuan revaluation issue and statement should be on familiar lines. This morning’s Current Account surplus has rose less than expected as the economy either needs a sharp pick up in exports or a slide in oil prices to reduce high import costs to maintain its surplus.

• Pound experienced its customary exaggerated movements and its brief foray above 1.84 encountered strong selling orders which sent it slipping back towards the 1.8225 support mark. It could be subjected to more volatile moves today as U.K. Trade deficit is expected to widen but Industrial Production could inch higher while BoE have no case to raise rates. With focus on Greenspan’s speech as well, the pair could be locked in broad range trading.
  

• Australian Dollar got a surprise boost from employment figures as the economy unexpectedly added jobs instead of a decline while the unemployment rate remained at 5.1% which is a 28 year low. However the main concern at the moment is sluggish spending as consumers are under record debt levels. Nonetheless the uncertainty around the U.S. interest rates is keeping the Aussie near 0.7675 with decent selling orders above 0.77.

*Only key potential market moving data is mentioned, for a detailed Economic Calendar please click on the ‘Financial Calendar’ link on the web-site.

EUR/USD – Yesterday’s low was 1.2205 and high was 1.2352.
The pair closed at 1.2237.

Large selling orders around 1.2355 set the pair crashing back towards it strong support area around 1.22. Uncertain outlook around the Dollar is keeping decent buying interest for the Euro on any foray below 1.22 with very strong support in the 1.2150-75 zone. On the upside mild resistance exists around 1.2310 followed by very strong resistance in the 1.2355-70 zone. Greenspan’s speech will be key driver for this pair.

Key resistance is seen at 1.2315 followed by 1.2375 while support starts at 1.2210 followed by 1.2155.

USD/JPY – Yesterday’s low was 106.57 and high was 107.37.
The pair closed at 107.25.

The Yen failed to break below strong Dollar bids around 106.55 and went back 107 with mild resistance around 107.45 followed by decent selling interest in the 107.75-90 zone. It is likely to remain in narrow range bound movements till the general Dollar direction after Greenspan’s speech. A break below the strong 106.50 support mark could accelerate gains for the Yen.

Key Resistance is seen at 107.45 followed by 107.95 while support starts at 106.45 followed by 106.05.

GBP/USD – Yesterday’s low was 1.8219 and high was 1.8402.
The pair closed at 1.8239.

The pair is prone to exaggerated movements and broke through some key resistance levels before encountering strong selling orders above 1.84. For now decent support exists around 1.8225 followed by decent buying interest in the 1.8155-70 zone. Mild resistance continues in the 1.8340-55 zone followed by strong selling orders above 1.84. Important events from both sides of the Atlantic are likely to see the pair go through volatile moves.

Key Resistance is seen at 1.8355 followed by 1.8410 while support starts at 1.8225 followed by 1.8175.

AUD/USD – Yesterday’s low was 0.7640 and high was 0.7703.
The pair closed at 0.7686.

Robust unexpected employment data has helped the Australian Dollar inch higher but decent selling orders exists on any moves above 0.77 with strong resistance in the 0.7725-40 zone. On the downside mild support exists in the 0.7640-55 zone followed by decent buying interest around 0.7575, the pair would be driven solely by the general trend around the Greenback.

Key Resistance is seen at 0.7695 followed by 0.7740 while support starts at 0.7625. followed by 0.7575.

Kunal Sharma
Forex Analyst

Easy Forex Pty Ltd. (Australia)

E-mail: kunal@easy-forex.com

Australian Financial Services License 246566

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