Australian FOREX Daily Outlook 13/06/2006

MARKET SUMMARY –13 JUNE06 (05:00GMT)

• The Dollar continued exerting strength against the major currencies in the overnight session with comments from Federal Reserve President Pianalto stating that recent news on US inflation exceeded her “comfort level”.In other markets, US stocks fell on Monday as interest rate concerns played heavily on the minds of market participants. The Dow Jones ended lower by 99pts, while the NASDAQ fell by 44pts. Crude oil dropped US$1.27 to US$70.36 a barrel after comments were released indicating that the first named storm of the hurricane season “Alberto”, would not affect US oil and gas production in the Gulf of Mexico. Looking ahead, the US PPI and retail sales are due out today with markets expecting 0.5% and 0.1% respectively.
  

• The Euro traded in a range of 1.2565 to 1.2620, before closing at 1.2587 in the New York session.
  

• The Japanese yen traded in a range of 114.14 to 114.59 versus the dollar, before closing at 114.38 in the New York session. On the data front, Japanese consumer confidence fell to 49.8 in May from 50.0 in April, with forecasters predicting a rise to 50.6. Japanese real GDP expanded by 0.8% in Q1, above the initial estimate of 0.5%.
  

• The Sterling traded in a range of 1.8463 to 1.8377, before closing at 1.8424 in the New York session. On the data front, input producer prices in the UK fell by 0.5% from a rise of 2.5% in the previous month. Looking ahead, CPI figures are due out today.
  

• The Aussie traded in a range of 0.7456 to 0.7488, before closing at 0.7449 in the New York session. Looking ahead, the Westpac consumer confidence is due out tomorrow.
  

• Gold fell by US$2.50 to US$611.30 an ounce on the back of a stronger greenback.

TECHNICAL COMMENTARY

• Euro 1.2580

Initial support at 1.2539 (38.2% retracement of the 1.1825-1.2980 rally) followed by 1.2403 (50% retracement of the 1.1951-1.2980 rally). Initial resistance is now located at 1.2653 (Jun 12 high) followed by 1.2686 (June 9 high).

• Yen 114.45

Initial support is located at 113.36 (June 8 low) followed by 112.91 (June 7 corrective low). Initial resistance is now at 114.47 (Jun 8 corrective high) followed by 115.11 (61.8% retracement of the 118.90-108.98 decline).

• Pound – 1.8410

Initial support at 1.8348 (38.2% retracement of the 1.7230 to 1.9027 advance) followed by 1.8206 (May 2 low). Initial resistance is now at 1.8486 (June 9 high) followed by 1.8579 (June 8 high).

• Aussie – 0.7425

Initial support at 0.7391 (Jun 7 reaction low) followed by 0.7357 (April 20 low 61.8% retracement of 0.7015-0.7795 rise). Initial resistance is now at 0.7505 (June 9 corrective high) followed by 0.7547 (June 5 corrective high).