Australian FOREX Daily Outlook 13/04/2006

MARKET SUMMARY –13APRIL06 (05:00GMT)

• The Dollar was generally firmer versus the major currencies overnight following the smaller than expected trade deficit. The US trade deficit narrowed from US$68.59 billion to US$65.74 billion in February, below market expectations centered on a shortfall near US$67.50 billion. In other markets, US shares were slightly higher in lackluster trade with investors unprepared to make big bets before Easter holidays. The Dow Jones index rose by 40pts while the NASDAQ was up by 4pts. Crude oil fell overnight by US36c to US$68.62 a barrel. Looking ahead and retail sales and consumer sentiment is due out later today in the States. The market expects retail sales for March to rise by 0.5% m/m following the 1.4% m/m drop in February. In April, the preliminary reading for the University of Michigan survey is expected to fall marginally to 88.5 from 88.9.
  

• The Euro traded in a range of 1.2065 to 1.2161, before closing at 1.2105 in the New York session.
  

• The Japanese yen traded in a range of 117.99 to 118.62 versus the dollar, before closing at 118.50 in the New York session.
  

• The Sterling traded in a range of 1.7463 to 1.7573, before closing at 1.7500 in the New York session. Average earnings in the UK [February] up 4.2%, 3 months to Feb. Timing of bonuses being paid in Feb [ previously paid in Jan and March ] thought to have inflated the result.
  
• The Aussie traded in a range of 0.7293 to 0.7333, before closing near its highs in the New York session.

TECHNICAL COMMENTARY

• Euro 1.2115

Initial support at 1.2075 (Apr 10 low) followed by 1.2031 (Apr 3 reaction low). Initial resistance is now located at 1.2235 (Apr 7 high) followed by 1.2335 (Apr 6 high).

• Yen 118.40

Initial support is located at 117.26 (Apr 6 low) followed by 116.68 (Apr 5 low). Initial resistance is now at 118.90 (Apr 11 high) followed by 119.21 (Mar 13 reaction high).

• Pound – 1.7540

Initial support at 1.7375 (Apr 10 low) followed by 1.7337 (76.4% retracement of the 1.7250 to 1.7619 advance). Initial resistance is now at 1.7535 (Apr 7 high) followed by 1.7626 (Mar 6 reaction high).

• Aussie – 0.7290

Initial support at 0.7255 (Apr 10 low) followed by 0.7219 (38.2% retracement of the 0.7015 to 0.7345). Initial resistance is now at 0.7345 (Apr 7 high corrective) followed by 0.7370 (61.8% retracement of the 0.7590 to 0.7015 decline).