Australian FOREX Daily Outlook 12/07/2005

Trading Forex Online with Easy Forex

12/07/05 (02:00 GMT)

• Dollar slipped significantly yesterday as well as the start of the Australasian session today. The market has shifted its focus on the structural imbalances plaguing the American economy, it is feared that tomorrows trade balance outcome could lead to a record deficit figure. This has also fit in well with the markets plan to take profits ahead of key US data released this week. However the broad sentiment is still in the Greenback’s favour. Oil prices have also eased back but the incident in London has added some geo-political concerns for the US.

• Euro has managed to benefit from the general bout of profit taking on the dollar and it has broken above key resistance levels. Data was positive for the Euro Zone with French industrial production coming in slightly higher than expected, as a weaker Euro continues to boost export orders. Also the acceptance of the EU constitution by Luxembourg gave a symbolic boost to the EU after the confidence crushing rejections by France and Netherlands. But for now it faces strong resistance within 1.22-1.23 which is a pivot region.
  

• Yen has broken below dollar bids around 111.50 as it was the most oversold currency against the Greenback. The easing of Oil prices below $60 pb has also lent some support and it has been rewarded for a stream of positive data releases in the last couple of weeks. Tomorrows trade balance date would be keenly eyed where surplus is expected to shrink due to the high impost costs of oil, while sluggish conditions in many regions has led to a decline in Japanese exports. This morning’s consumer confidence data has declined as consumers remain pessimistic about the economy and fear further increases in oil prices. For now the dollar has bid interest on any moves below 110.85.

• Pound has managed to pare back its losses that it experienced post the terrible events last Thursday. The higher than expected sharp rise in PPI would have a substantial impact on Bank of England’s rate setting meeting next month. Also expectations of a compromise between the UK and France in terms of EU budget issues also helped in boosting the Pound with Prime Minister Blair expected to announce some positive measures in his EU Presidency speech. Earlier house price figures came in slightly higher than expectations; this is further proof of the housing market having stabilized for now. At present resistance lies around 1.77.

• Australian Dollar took cue from other majors and has managed to break above the 0.75 mark. This inspite of the home loans data coming in much lower than expectations, which is probably the first concrete sign that the housing market is likely to slip significantly in the months to come. Commodity prices have also stabilized, while the record Australian employment result last week is still fresh in the markets mind.

EUR/USD – Yesterday’s low was 1.1959 and high was 1.2084.
The pair closed at 1.2054.

The pair has broken back above 1.21 and breached past key resistance levels but is currently below the 1.2195-1.2210 resistance zone. A decisive break above this mark could lead to moves towards 1.2250 with very strong resistance in the 1.2290-1.2310 zone. Decent sized offers are lined above this region and could lead to strong selling interest. On the downside, mild support lies in the 1.2020-45 zone with mixed technical interest around that region. A break below could accelerate its losses which should bring into focus the strong support zone of 1.1940-55 which has strong buying interest around that region.

Key resistance is seen at 1.2215 followed by 1.2305 while support starts at 1.2040 followed by 1.1955.

USD/JPY – Yesterday’s low was 111.64 and high was 112.23.
The pair closed at 111.74.

The Yen has managed to break below Dollar bids around 111.50 but stronger bids lie in the strong support zone of 110.80-95. A break below brings into focus the pivot mark of 110.30 with strong Dollar buying interest around that mark; however a loss of that mark could accelerate gains for the Yen. On the upside, resistance lies in the 112.10-25 zone with a decisive break above likely to accelerate its losses. It should bring into focus the strong resistance mark at 112.75 with strong selling interest around that mark.

Key Resistance is seen at 112.25 followed by 112.75 while support starts at 110.95 followed by 110.30.

GBP/USD – Yesterday’s low was 1.7370 and high was 1.7589.
The pair closed at 1.7550.

The Pound finally managed to rebound as it was in deep oversold territory and has broken above 1.76. Immediate resistance lies around 1.7695 but mixed technical interest exists around that mark. A decisive break above that mark could lead to moves towards 1.77 with very strong resistance in the 1.7745-60 zone. On the downside, support has moved up to 1.7510 with a break likely to accelerate losses towards the strong support zone of 1.7440-55 with decent buying interest around that mark.

Key Resistance is seen at 1.7695 followed by 1.7760 while support starts at 1.7515 followed by 1.7440.

AUD/USD – Yesterday’s low was 0.7418 and high was 0.7487.
The pair closed at 0.7480.

The Australian Dollar has taken cue from European currencies and pushed higher breaking resistance at 0.7455 but stronger resistance lies in the 0.7530-45 zone. A break above could accelerate moves towards 0.7590 strong resistance mark with selling interest above it. Offers become stronger on any break above 0.76 but 0.75 region holds mixed technical interest. On the downside support has moved up to 0.7425 with a break below 0.74 likely to accelerate losses, bringing the strong support zone of 0.7355-70 into focus.

Key Resistance is seen at 0.7545 followed by 0.7590 while support starts at 0.7425. followed by 0.7375.

Kunal Sharma
Forex Analyst

Easy Forex Pty Ltd. (Australia)
E-mail: kunal@easy-forex.com

Australian Financial Services License 246566

Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products