FOREX Trading Australia Daily Outlook 28/04/2005

FOREX Outlook 28/04/05 (02:00 GMT)

FOREX Trading Australia – Foreign Exchange Market Summary

Dollar

• Dollar’s impressive rebound after the initial sell off post a horrid Durable Goods orders outcome augurs well for a substantial rally if the Fed becomes more hawkish in its tone. However, it faces a risk in the form today’s Q1 GDP result with recent soft conditions pointing towards a below estimated outcome. Oil prices eased further as strong inventories are there for all to see while the approach of prices towards $60 pb changes the demand equation bringing prices back in line.

Euro

• The Euro bulls are realizing that they cannot push it decisively higher on the back of a soft U.S. growth story especially since the growth potential in the Euro-Zone is worse. German Consumer Confidence as well as French Business Confidence indicator declined more than expected as the economy is stuck in a cyclical rut. It remained within the 1.29 range against the Greenback and for now mild support and resistance levels are 1.2875-1.3015.

Yen

• The Yen has gone back above 106 against the Dollar as this morning’s Japanese Industrial Production data has come in much lower than expected which poses probing questions on the economy’s ability to recover from its current sluggish conditions. However, Retail sales have come in better than expected & further easing of oil prices should help it but technically the Yen is a bit directionless with strong Dollar bids around 105.40-50 while 106.50-75 holds resistance.

Pound

• The Pound after briefly slipping below 1.90 bounced back up on the unlikely outcome of a jump in Mortgage approvals and weak U.S. data. Still the recent weak retail sales and CBI Industrial, trends data is fresh in the market’s mind and the Pound remains vulnerable taking cue from the Dollar’s general direction. For now, 1.8975 is the key support mark.

Australian Dollar

• The Australia dollar slipped as the PPI and CPI data have pointed strong signals to the RBA to stay put next week. However in spite of this and commodity prices subjected to another bout of profit taking the Aussie has shown surprising resilience to stay above the support zone at 0.7745-60. The main reason behind this support is the uncertainty surrounding the direction of U.S., Euro-Zone and Japanese economies direction.

• Gold prices have eased back after its inability to decisively break past the resistance zone at 435.50-436.75 and some profit taking ensued. However it has strong support in the 429.25-430 zone and its ability to hold above it could mark a fresh assault higher.

Economic Data Released

Upcoming Economic Releases

*Only key potential market moving data is mentioned, for a detailed Economic Calendar please click on the ‘Financial Calendar’ link on the web-site.

FOREX Technical Analysis

EUR/USD – Yesterday’s low was 1.2904 and high was 1.2987.
The pair closed at 1.2925.

The pair dipped towards 1.29 before poor U.S. data propelled it higher; however the Euro remains vulnerable with mild support around 1.2875. A break below could accelerate losses bringing the strong support zone of 1.2785-1.2810 into focus. On the upside 1.2990-1.3010 holds mild resistance followed by a stronger one around 1.3070-85. U.S. GDP data is eyed for further direction.

Key resistance is seen at 1.3010 followed by 1.3095 while support starts at 1.2875 followed by 1.2795.

USD/JPY –Yesterday’s low was 105.67 and high was 106.39.
The pair closed at 106.05.

The Yen has gone back into the 105 region with easing of oil prices helping it. Dollar has strong bids in the 105.40-55 region with a break below targeting the very strong support mark of 105.10-25 with good buying interest. On the upside 106.50-65 holds mild resistance with decent selling interest on any foray towards 107.

Key Resistance is seen at 106.55 followed by 107.15 while support starts at 105.45 followed by 105.05.

GBP/USD – Yesterday’s low was 1.8990 and high was 1.9093.
The pair closed at 1.9043.

The pair has remained in the 1.90 region on conflicting data with key support at 1.8975 with a break below targeting the pivot region of 1.8940-55 where decent buying interest exits. On the upside 1.9060-75 holds mild resistance with strong resistance in the 1.9125-40 zone. Lack of any local data put focus on U.S. events.

Key Resistance is seen at 1.9075 followed by 1.9145 while support starts at 1.8975 followed by 1.8925.

Australian Dollar

AUD/USD – Yesterday’s low was 0.7742 and high was 0.7784.
The pair closed at 0.7759.

Poor data has sent the Aussie slip back towards the support mark at 0.7750 and looks vulnerable for further losses. Good support exists in the 0.7710-25 zone followed by decent buying interest above 0.7675. On the upside any foray towards 0.78 should lead to selling interest with strong resistance around 0.7825.

Key Resistance is seen at 0.7795 followed by 0.7830 while support starts at 0.7725. followed by 0.7675.

Kunal ‘Kris’ Sharma
Forex Analyst
E-mail: kris@easy-forex.com

Australian Financial Services License 246566

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