FOREX Outlook 22/03/05 ( GMT)
FOREX Trading Australia – Foreign Exchange Market Summary
Dollar
- Dollar rallied across the board on speculation that the Fed Reserve would have a more hawkish tone to their accompanying statement. Some quarters expect the Fed to remove the word ‘measured’ which could further boost the Dollar. The market was also looking to adopt a more neutral position ahead of the Fed’s meeting and given Dollar’s steady fall over the last few weeks, its position squaring rally was a natural outcome.
Euro
- Euro’s losses accelerated after it broke below the strong support zone of 1.3255-70, finally stabilizing around 1.3150 but is still looking vulnerable. Apart from the broad based support for the Dollar ahead of Fed’s meeting, the market was also concerned by the flexibility in the European stability pact allowing member countries to go beyond their current 3% of GDP budget deficit. A dovish tone by the Fed could reverse the losses incurred by the Euro.
Yen
- The Yen was under pressure like other majors but the strong resistance mark of 105.50 has held firm for now. Talk of the actual path and time frame of Yuan’s revaluation dominated the market as Japanese markets were closed. A break above the 105.50 brings the strong resistance of 105.80-106 into focus.
Pound
- The Pound fell sharply by around 250 points maintaining the exaggerated movements it’s prone to. Key support levels were broken and its losses accelerated after 1.91 gave way. 1.8925-40 is the next strong support mark with a break below risking further acceleration of losses. Today’s
Australian Dollar
- The Australian dollar fell, taking cue from other majors as well as affected by profit taking on commodities namely Gold and Copper. The Aussie is vulnerable for further losses towards 0.7790-0.7810, as speculators might liquidate some more positions given that they are record long on the Aussie.
Economic Data Released
|
GMT |
Release |
Region |
Previous |
Actual |
Outcome |
|
|
|
4Q Industrial Production |
|
-2.9% |
6.6% |
Much higher than expected as global demand picks up. |
|
|
|
January Wholesale Sales |
|
1.1% |
-0.2% |
Largely due to fall in auto sales. |
|
Upcoming Economic Releases
|
GMT |
Release |
Region |
Previous |
Forecast |
Expectation |
|
|
February Consumer Spending |
|
1.5% |
-0.2% |
Should decline as consumer confidence remains low. |
|
|
February CPI m/m |
|
-0.5% |
0.3% |
Like other region should rise on high oil & energy costs. |
|
|
February PPI m/m |
|
0.3% |
0.3% |
Could inch higher than expected on energy price spike |
|
|
FOMC Interest rate decision |
|
2.5% |
2.75% |
Fed to continue on its measured rate hike stance |
FOREX Technical Analysis
EUR/USD – Yesterday’s low was 1.3139 and high was 1.3315.
The pair closed at 1.3157.
Dollar’s broad rally has sent this pair down towards 1.3150 breaking key support levels. For now decent buying interest exists on moves down to 1.3110-25. A decisive break below could accelerate losses towards 1.3050. The Fed’s statement is the key with a dovish tone could send the Euro higher with resistance around 1.33.
Key resistance is seen at 1.3255 followed by 1.3345 while support starts at 1.3110 followed by 1.3045.
USD/JPY – Yesterday’s low was 104.53 and high was 105.05.
The pair closed at 104.72.
Dollar’s strength has sent the pair above 105 but it has mild resistance around 105.25 and a stronger one around 105.50. Any break above 106 should see very strong selling interest. On the downside mild Dollar bids exists around 104.50 with strong support around the 104.25 mark.
Key Resistance is seen at 105.55 followed by 105.95 while support starts at 104.45 followed by 104.10.
GBP/USD – Yesterday’s low was 1.8944 and high was 1.9204.
The pair closed at 1.8958.
A break below 1.91 accelerated losses with the 1.8925-40 zone the crucial pivot region. A strong break below this zone could accelerate losses towards 1.8850. But it should find good buying interest around 1.89 and could rally back towards 1.9075 as it has been oversold. Resistance is now around 1.91.
Key Resistance is seen at 1.9095 followed by 1.9205 while support starts at 1.8925 followed by 1.8850.
Australian Dollar
AUD/USD – Yesterday’s low was 0.7835 and high was 0.7935.
The pair closed at 0.7844.
It has fallen taking cue from other majors, with the 0.7845-60 zone the crucial support zone, a break below could accelerate losses towards 0.78 where strong buying interest is expected to crop up. On the upside any foray above 0.79 could attract selling interest with a strong resistance around 0.80.
Key Resistance is seen at 0.7925 followed by 0.7975 while support starts at 0.7835 followed by 0.7795.
Kunal ‘Kris’ Sharma
Forex Analyst
Australian Financial Services License 246566
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