Australian FOREX Daily Outlook 15/05/2006

MARKET SUMMARY –15MAY06 (05:00GMT)

• The Dollar recovered in the early part of the Friday session following a better than expected trade deficit. However, the dollar could not hold onto these gains as consumer confidence data disappoints. The US trade deficit eased to US$62bln in March from 65.6bln in February. The market was expecting a result of US$67bln. The University of Michigan consumer confidence hit a 7 month low of 79.0 for the month of May from 87.4 April. The market had expected a result nearer 86.1. In other markets, US shares were again lower with the Dow Jones index down by 119pts and the NASDAQ down 29pts. Crude oil fell by US$1.28 to US$72.04 a barrel after a report suggested that high oil prices were derailing US consumer confidence. Looking ahead and the New York Fed survey and Net Foreign Security Purchases are due out later today in the States.
  

• The Euro traded in a range of 1.2839 to 1.2955, before closing at 1.2930 in the New York session. Today in Asia the Euro was initially bought up to a high of 1.2972 before profit takers emerged pushing the currency back down to 1.2920.
  

• The Japanese yen traded in a range of 109.34 to 110.71 versus the dollar, before closing at 110.05. Today in Japan the current account surplus rose 32.8 percent in March from the same month a year earlier to 2.3951 trillion yen and forecasts had centered on a year-on-year rise of 10.9 percent to 2.0 trillion yen.
  
• The Sterling traded in a range of 1.8818 to 1.8996, before closing at 1.8950 in the New York session.
  

• The Aussie traded in a range of 0.7698 to 0.7786, before closing at 0.7730 in the New York session.
  
• Gold yet again reached 25 year high at 729.95USD per Troy Ounce, Later on it retreated in a volatile move to 711 USD.

TECHNICAL COMMENTARY

• Euro 1.2925

Initial support at 1.2829 (May 12 low) followed by 1.2660 (May 9 low). Initial resistance is now located at 1.2958 (May 12 high) followed by 1.3000 (Psychological resistance).

• Yen 109.50

Initial support is located at 109.21 (61.8% retracement of the 101.67 to 121.41 advance) followed by 108.76 (Sep 5, 2005 reaction low). Initial resistance is now at 110.74 (May 12 high) followed by 111.54 (May 11 corrective high).

• Pound – 1.8950

Initial support at 1.8816 (May 12 low) followed by 1.8513 (May 9 corrective low). Initial resistance is now at 1.9000 (May 12 high) followed by 1.9078 (May 5, 2005 corrective high).

• Aussie – 0.7700

Initial support at 0.7680 (May 11 low) followed by 0.7633 (May 9 corrective low). Initial resistance is now at 0.7811 (Jun 21, 2005 high) followed by 0.7843 (Apr 29, 2005 reaction high).