Australian FOREX Daily Outlook 24/04/2006

MARKET SUMMARY –24APRIL06 (05:00GMT)

• The Dollar weakened across the board on Friday night and especially versus Asian currencies following comment by the G7. The G7 indicated it will single out China in their call for more flexibility in exchange rates. Traders believe that more flexibility in China’s exchange rate would buoy Asian currencies, especially the yen. In other markets, US shares were mixed overnight with the Dow Jones index up by 5 pts while the NASDAQ fell by 20pts. Crude oil jumped above US$75, fuelled by fears of a possible supply disruption in Iran and low US gasoline supplies. Crude rose by $US 3.22c to US$75.17 a barrel.
  

• The Euro traded in a range of 1.2310 to 1.2365, before closing at 1.2340 in the New York session.
  

• The Japanese yen traded in a range of 116.50 to 117.55, before closing near its highs in the New York session. The Japanese yen made further gains against the dollar in the Asian session, appreciating to JPY115.35 per US dollar at one stage.
  
• The Aussie traded in a range of 0.7390 to 0.7460, before closing at 0.7440 in the New York session.
  
• Gold rose on Friday night due to speculative bargain buying and short covering after the sell off on Thursday. Gold lifted by $US12.40 an ounce to US$635.50.

TECHNICAL COMMENTARY

• Euro 1.2350

Initial support at 1.2265 (Apr 21 low) followed by 1.2223 (Apr 18 reaction low). Initial resistance is now located at 1.2397 (Apr 19 high) followed by 1.2412 (38.2% retracement of the 1.3668 the 1.1638 decline).

• Yen 115.80

Initial support is located at 115.45 (Feb 28 reaction low) followed by 114.83 (76.4% retracement of the 113.41 to 119.41 rise). Initial resistance is now at 118.23 (Apr 18 reaction high) followed by 118.90 (Apr 11 high).

• Pound – 1.7860

Initial support at 1.7679 (Apr 18 reaction low) followed by 1.7626 (Former resistance from Mar 6). Initial resistance is now at 1.7937 (Jan 25 high &amp Apr 19 high) followed by 1.7946 (61.8% retracement of the 1.8501 to 1.7048 decline).

• Aussie – 0.7450

Initial support at 0.7345 (Apr 12 high) followed by 0.7270 (Apr 17 low). Initial resistance is now at 0.7484 (Apr 19 high) followed by 0.7500 (13 – month trendline resistance).