Australian FOREX Daily Outlook 20/06/2006

MARKET SUMMARY –20JUNE06 (05:00GMT)

• The Dollar rose across the board in flat trading against the major currencies in the overnight session as the market weighed in on a possible rate hike at the end of this month. US homebuilder sentiment dropped by 4pts as the NAHB survey showed a level of 42 compared to an estimate of 45. Dallas Federal Reserve president Richard Fisher commented that there was no imminent crisis in the housing sector. Shortly after, Atlanta Federal president Jack Guynn raised concerns again about the size of the federal budget deficit. In other markets, the Dow Jones index fell by 72pts and the NASDAQ retreated by 19pts. Crude oil prices fell as Iran commented on the positive atmosphere created by Western nations in their bid to discuss its nuclear ambitions. Crude oil ended at US$68.98 a barrel, a drop of US90c. Looking ahead, housing starts is due out today.
  

• The Euro traded in a range of 1.2553 to 1.2652, before closing at 1.2575 in the New York session. On the data front, trade balance came in at -$2billion versus estimates of -$1billion.
  

• The Japanese yen traded in a range of 115.07 to 115.77 versus the dollar, before closing at 115.54 in the New York session. On the data front, the minutes of the May BoJ meeting are due out today.
  

• The Sterling traded in a range of 1.8370 to 1.8532, before closing at 1.8403 in the New York session. Looking ahead, M4 money supply is due out today.
  

• The Aussie traded in a range of 0.7357 to 0.7385, before closing at 0.7363 in the New York session.
  
• Gold fell by US$9.30 to $572.40 an ounce, dragged down by a stronger greenback and weaker oil prices. Base metals too fell sharply due to fears of slowing growth in the US and China.

TECHNICAL COMMENTARY

• Euro 1.2570

Initial support at 1.2552 (June 19 low) followed by 1.2530 (Jun 13 low). Initial resistance is now located at 1.2674 (June 16 high) followed by 1.2686 (Jun 9 high).

• Yen 115.50

Initial support is located at 114.55 (June 16 low) followed by 113.56 (Jun 9 low). Initial resistance is now at 115.78 (June 19 high) followed by 115.98 (April 24 high and former gap low).

• Pound – 1.8400

Initial support at 1.8368 (June 19 low) followed by 1.8316 (Jun 13 corrective low). Initial resistance is now at 1.8561 (Jun 16 high) followed by 1.8579 (Jun 8 high).

• Aussie – 0.7365

Initial support at 0.7345 (June 14 low) followed by 0.7313 (61.8% retracement of 0.7015 to 0.7795 advance). Initial resistance is now at 0.745 (June 16 high) followed by 0.7505 (June 9 corrective high).