Australian FOREX Daily Outlook 14/04/2010

Yen Under Pressure

CURRENCY TRADING SUMMARY – 14th April (00:30GMT)

U.S. Dollar Trading (USD) found strength in mild risk aversion during the Asian session but strong US stocks and an upbeat Greece Debt Auction saw the dollar on the back foot in the European/US sessions. February Trade Balance widened to -39.7bn vs. -37bn previously. Also of note is talk in the market of the FED dropping the ‘extended period’ language in the next FOMC statement. In US stocks, DJIA +13 points closing at 11019, S&amp P +1 points closing at 1197 and NASDAQ +8 points closing at 2465. looking ahead, March Core Retail Sales are forecast at 0.5% vs. 0.8% previously. March Core CPI is forecast at 0.1% m/m.

The Euro (EUR) found support at 1.3560 on two occasions before bouncing and closing above 1.3600. The market responded warmly to the solid Greece Bond auction. German March CPI was at 0.5% m/m. EUR/JPY was well supported after dipping in Asia on the DPJ Yen report. Overall the EUR/USD traded with a low of 1.3544 and a high of 1.3629 before closing at 1.3610. Looking ahead, March Industrial Production is forecast 0.2% vs. 1.7% previously.

The Japanese Yen (JPY) started the day strong as profit taking pushed EUR/JPY and USD/JPY lower but the mood changed dramatically as a draft report from the DPJ party called for the government to weaken the Yen with a target of Y120. Overall the USDJPY traded with a low of 92.56 and a high of 93.44 before closing the day around 93.20 in the New York session.

The Sterling (GBP) was well supported off lows from better than expected Trade Balance figures. February Trade Balance improved to -6.2bn vs. -8bn previously. GBP/JPY led the pound higher as it rallied above Y143. EUR/GBP was mixed after the pair found support at 0.8810 and grinded higher for the remainder of the day. Overall the GBP/USD traded with a low of 1.5334 and a high of 1.5452 before closing the day at 1.5410 in the New York session.

The Australian Dollar (AUD) was under heavy selling pressure as the pullback from Monday’s year highs accelerated. The AUD is facing headwinds as the market has already priced in RBA rate hikes and the recent out-performance of the commodity currency is pared back. Overall the AUD/USD traded with a low of 0.9221 and a high of 0.9297 before closing the US session at 0.9280. UPDATE March Consumer Confidence -1.0%.

Oil &amp Gold (XAU) fell under $1150 briefly but closed above the figure as the market searches for support. Overall trading with a low of USD$1144 and high of USD$1157 before ending the New York session at USD$1155 an ounce. Crude Oil fell for a 5^th day as oversupply concerns dominate trader discussions. WTI Oil Closed -$0.29 at $84.05 a barrel.

TECHNICAL COMMENTARY

Euro – 1.3660

Initial support at 1.3500 (Apr 9 high) followed by 1.3341 (Apr 9 low). Initial resistance is now located at 1.3741 (Mar 18 high) followed by 1.3819 (Mar 17 high)

Yen – 93.20

Initial support is located at 92.76 (Mar 31 low) followed by 92.25 (0.382 of 88.14-94.79). Initial resistance is now at 93.77 (Apr 9 high) followed by 94.27 (Apr 7 High).

Pound – 1.5425

Initial support at 1.5130 (Apr 6 low) followed by 1.5044 (Mar 31 low). Initial resistance is now at 1.5575 (Feb 23 high) followed by 1.5688 (Feb 18 low).

Australian Dollar – 0.9320

Initial support at 0.9224 (Apr 8 low) followed by the 0.9166 (Apr 6 low). Initial resistance is now at 0.9388 (Apr 12 high) followed by 0.9406 (Nov 16 high).

Gold – 1155

Initial support at 1143 (Apr 8 low) followed by 1132 (Apr 7 low). Initial resistance is now at 1169 (Dec 8 high) followed by 1183 (0.764 of 1126.56-1044.85).

Oil – 84.45

Initial support at 83.80 (Intraday Support) followed by 82.50 (Intraday Support). Initial resistance is now at 85.00 (March high) followed by 86.00 (Intraday Resistance).