Australian FOREX Daily Outlook 13/06/2005

13/06/05 (02:00 GMT)

• Dollar stormed ahead as the Trade Deficit outcome came below forecasts while the previous month’s figure was slightly revised down as even though imports remain high as ever, exports are keeping pace with it. Thus the market got the perfect excuse to punish other currencies for their recent poor fundamentals and a relief rally for the Greenback ensued. The G8 summit concluded with no mention of currency issues in their statement and some minor discussions on this issue were on repetitive lines.

• Euro’s decisive break below 1.22 accelerated its losses and it has broken below 1.21 as well in early Monday trading. Earlier on Friday, French data was very weak which set the tone for Euro’s fall post U.S. deficit outcome. French Trade Deficit came in much higher than estimated as exports remain stagnant & imports soared higher while French industrial production also declined more than expectations as new orders have dried up. The Dollar faces a spate of buying orders for the Euro down towards the pivot mark of 1.20 but a break could accelerate losses.

• Yen like others, fell against the Dollar with the strong resistance zone of 108.85-109.10 capping Dollar’s gains for now. 109 is the crucial mark for this pair as the Dollar has threatened to, but not managed to break above that mark this year but the Yen remains under pressure after this morning’s GDP data was unexpectedly revised down due to less inventory build up. Nonetheless the economy is projecting a better growth outlook than it has done for last few years.

• Pound slipped back below 1.81 but has decent support in the 1.8155-70 region and has stabilized around 1.81 for now. Meanwhile in regards to the EU budget, U.K.’s Chancellor Brown has stated that there is no way they will give up their rebate and that this issue was not up for negotiation. Today’s PPI and house price data will be eyed for further direction but the Pound remains under pressure as house prices continue to slide and a loss of the pivot mark of 1.80 could accelerate losses for the Pound.

• Australian Dollar managed to keep above 0.76 in spite of the broad rally by the Greenback as the direction of commodity prices remains mixed and good real money demand has helped the Aussie remain supported. Continuous weakness of European currencies and easing in commodity prices could accelerate the Aussie’s losses but for now the 0.75 region holds mixed interest.

*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 – Friday’s low was 1.2106 and high was 1.2247.
The pair closed at 1.2116.

An acceptable deficit outcome sealed the deal for this pair and the Euro has slipped below 1.21 with mild support around 1.2055 followed by the crucial psychological mark of 1.20. Good support and buying orders exists for this pair in the 1.1990-1.2010 zone with a break below likely to accelerate Euro’s losses into the 1.18 territory. On the upside mild resistance exists around 1.2175 followed by very strong resistance and offers on any break above 1.2255.

Key resistance is seen at 1.2175 followed by 1.2255 while support starts at 1.2055 followed by 1.1990.

USD/JPY – Friday’s low was 107.32 and high was 108.67.
The pair closed at 108.65.

Offers around 108.25 were easily broken as the Dollar rallied towards the very strong resistance zone of 108.85-109.10. The Dollar has failed to break above this zone since last October and very strong selling orders exists above 109. However, a decisive break higher could accelerate losses for the Yen and send the pair towards 111. On the downside mild Dollar bids lie around 108 followed by very strong support and buying orders in the 107.35-50 zone.

Key Resistance is seen at 108.85 followed by 109.25 while support starts at 107.95 followed by 107.35.

GBP/USD – Friday’s low was 1.8106 and high was 1.8263.
The pair closed at 1.8120.

The pair is back towards its bottom range with mild support in the 1.8055-70 zone, a break below could bring the pivot mark of 1.80 into focus with strong support in the 1.7995-1.8115 zone. Bottom pickers have lined up decent sized buy orders around 1.80 while on the upside mild resistance exists around 1.8170 followed by strong resistance around 1.8255 with decent sized selling orders on any break above 1.83. Today’s U.K. data will provide further direction.

Key Resistance is seen at 1.8170 followed by 1.8255 while support starts at 1.8055 followed by 1.7995.

AUD/USD – Friday’s low was 0.7607 and high was 0.7676.
The pair closed at 0.7609.

Commodity prices have remained firm thus keeping the Australian Dollar supported above 0.76 with mild support around 0.7575 followed by very strong support in the 0.7525-40 zone. A break below 0.75 could accelerate losses for the Aussie. On the upside mild resistance exists around 0.7655 followed by strong selling interest on any break above 0.77.

Key Resistance is seen at 0.7655 followed by 0.7710 while support starts at 0.7575. followed by 0.7525.

Kunal Sharma
Forex Analyst

Easy Forex Pty Ltd. (Australia)

E-mail: kunal@easy-forex.com

Australian Financial Services License 246566

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