FOREX Trading Australia Daily Outlook 29/04/2005

FOREX Outlook 29/04/05 (02:00 GMT)

FOREX Trading Australia – Foreign Exchange Market Summary

Dollar

• Dollar remains firm in spite of the continuation of weak data with the GDP outcome pointing towards the weakest growth in 2 years but inflationary pressures are rising increasing the chances of the Fed going for an aggressive rate hike stance. The method of raising rates aggressively against a back drop of slow growth might be detrimental to the economy in the long run but for a short to mid term horizon it is very Dollar positive.

Euro

• The Euro is struggling to make any substantial inroads in spite of weak U.S. data and is looking vulnerable for further losses. Meanwhile voices of dissent against ECB’s policies are increasing with Italian Prime Minister Berlusconi stating that their policies are destroying the competitiveness of Euro-Zone companies. This comes amid the backdrop of Italian Business Confidence dropping to its lowest level in more than 3 years. 1.2875 support mark is holding well for now.

Yen

• The Yen hasn’t lost ground in spite of weak data due to thin liquidity as Japanese markets are closed today and most of next week as well. Also a few quarters are expecting some positive news in terms of Yuan revaluation while the further easing of oil prices also supported the Yen. BoJ Gov Fukui maintains his views of economy picking up during the course of the year however doubts are increasing in that regard. For now strong Dollar bids remain in the 105.20-40 zone.

Pound

• The Pound went back towards 1.91 as the Nationwide house price survey showed an unexpected increase. However, it does not represent a clear trend and house prices continue to moderate on a broader level. Technicals are driving this pair with strong support continuing in the 1.8975-1.90 zone while its gains against the Euro are also helping it on the main pair with resistance seen around 1.9185-1.92.

Australian Dollar

• The Australian dollar’s foray above 0.78 post poor U.S. data outcome was short lived as selling orders are strong in the 0.7825-40 zone. In the current backdrop of U.S. rates rising and RBA likely to stay put, slowly but surely Aussie’s yield advantage is reducing significantly. Lack of a clear trend on other majors is keeping it supported above 0.7725-40 for now.

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 1.2881 and high was 1.2942.
The pair closed at 1.2904.

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 106.45 followed by 107.05 while support starts at 105.45 followed by 105.05.

GBP/USD – Yesterday’s low was 1.9014 and high was 1.9104.
The pair closed at 1.9073.

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 1.9155 holds mild resistance with strong resistance in the 1.9195-`.9215 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 0.7748 and high was 0.7819.
The pair closed at 0.7784.

Poor data has sent the Aussie slip back towards the support mark at 0.7750 but has strong support around that mark, a break below targets good support in the 0.7710-25 zone. On the upside any foray towards 0.7825 should lead to selling interest with strong resistance around 0.7855.

Key Resistance is seen at 0.7825 followed by 0.7860 while support starts at 0.7755. followed by 0.7705.

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

Australian Financial Services License 246566

Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products