Australian FOREX Daily Outlook 24/06/2005

24/06/05 (03:00 GMT)

• Dollar marched ahead full steam as technical factors and positive sentiment behind it were supported by good data results. Jobless claims fell more than expected increasing hopes of a solid Payrolls result next week. Home sales came in around its steady levels while the yield gap in the Dollar’s favour is set to increase next week thus adding to its bid tone. Meanwhile, high oil prices is not stiffening demand thus prices managed to hit another record by breaking above $60 pb and remain well supported for now. China made a bold bid to acquire the U.S. energy Co. Unocal Corp. with a higher bid than the rival one from Chevron. However political factors are likely to lead to Chevron sealing the deal.

• Euro slipped by around 100 points as data continued to be on soft side and with absolutely no factors to drive it higher, pushing it down seemed like the sole choice. Italian Consumer Confidence declined more than expected as apart from the concerns about the sluggish conditions plaguing the economy, the uncertainty around the Euro is leading to a plunge in confidence. Lack of any statement from the ECB to dismiss recent increased speculation in regards to rate cut for the Euro-zone, is also adding to the uncertainty. A decisive break below 1.20 could accelerate losses for the Euro.

• Yen remains locked in its narrow range as contradictory factors and mixed technical interest in the 108.55-109.15 zone is leading to stiffened movements for now. The positives emanating from the Tertiary Industry index inching higher was offset by the general Dollar rally and concerns of Oil prices going to another record high. The data augurs well for the crucial Tankan surveys with business sentiment expected to inch higher however exports need to pick up to keep the economy on the recovery path.

• Pound like the Euro slipped back on weak data and on lack of any factors to drive it higher. CBI Industrial trends survey showed manufacturing orders falling to its weakest level since October 2003 with manufacturers pessimistic about current conditions as well as the outlook. This adds to another strong case for the BoE to cut rates in the near future. Strong selling interest has moved lower on any foray above 1.8250.

• Australian Dollar took cue from other majors and has slipped back towards the lower end of its recent range and remains mildly supported around 0.77. Mild profit taking on metals coupled with continuous weakness in European currencies finally dragged the Aussie lower. Meanwhile, the Kiwi Dollar had a larger decline as Current Account deficit ballooned while GDP came in slightly lower than expected and high interest rates is keeping biz confidence low.

EUR/USD – Yesterday’s low was 1.2016 and high was 1.2143.
The pair closed at 1.2124.

The pair is hovering around the recent strong support zone of 1.2015-30 but a decisive break below could accelerate losses for the Euro. Decent buying interest is situated around 1.20 with the next distant support in the 1.1890-1.1910 zone. On the upside mild resistance has moved down to 1.2115 followed by very strong resistance and selling interest in the 1.2190-1.2210 zone.

Key resistance is seen at 1.2115 followed by 1.2205 while support starts at 1.2000 followed by 1.1925.

USD/JPY – Yesterday’s low was 108.42 and high was 109.03.
The pair closed at 108.95.

Contradicting data has seen the pair see saw between 108.50-109 with mild support around 108.40 followed by very strong Dollar buying interest in the 107.85-108.10 zone. A break below the pivot mark of 107.75 should see the Yen’s gains accelerate but otherwise it should stay range bound. On the upside mild resistance exists around 109.25 with a decisive break above bringing into focus the strong resistance zone of 109.60-75 with a break above likely to accelerate the Yen’s losses.

Key Resistance is seen at 109.25 followed by 109.75 while support starts at 108.15 followed by 107.75.

GBP/USD – Yesterday’s low was 1.8137 and high was 1.8230.
The pair closed at 1.8157.

It has followed the Euro and slipped back into the 1.81 region with mild support in the 1.8125-40 zone with a break below likely to lead to strong support and decent buying interest in the 1.8045-60 zone. A break below 1.80 is likely to accelerate its losses while on the upside mild resistance exists around 1.8225 followed by very strong resistance and selling interest on any foray above 1.83.

Key Resistance is seen at 1.8225 followed by 1.8305 while support starts at 1.8125 followed by 1.8040.

AUD/USD – Yesterday’s low was 0.7689 and high was 0.7787.
The pair closed at 0.7704.

The Australian Dollar slipped back taking cue from other majors with mild support in the 0.7685-0.7705 zone with a break below bringing the 0.7625 support mark into focus with decent buying interest around it. On the upside resistance has moved down top the 0.7755 with strong resistance and heavy selling interest on any foray above 0.78.

Key Resistance is seen at 0.7815 followed by 0.7845 while support starts at 0.7725. followed by 0.7675.

Kunal Sharma
Forex Analyst

Easy Forex Pty Ltd. (Australia)

E-mail: kunal@easy-forex.com

Australian Financial Services License 246566

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