FOREX Trading Australia Daily Outlook 30/05/2005

30/05/05 (01:00 GMT)

FOREX Trading Australia – Market Summary

• Dollar slipped back a bit on Friday as profit taking ahead of a long weekend in the U.S. and U.K. offset the current the surge in positive sentiment for the Greenback. Personal Income increased as expected but spending declined while Univ. of Michigan Consumer Confidence survey bettered forecasts. U.S. data outcomes are watched this week for further direction but oil prices have inched back above $50 pb with peak consumption season in the U.S. approaching.

• The Euro has slipped back towards 1.25 in early Monday trading as French voters have overwhelmingly rejected the EU constitution. It also casts a shadow on Chirac’s popularity as some see it as a rejection of his domestic policies as well. Earlier on Friday, French Biz Confidence indicator declined as output expectations fell. This is a heavy data week for the Zone with below par data likely to sink the Euro.

• The Yen has gone back into the 108 region on the general Dollar rally post French referendum but Japanese data is starting to pick up. This morning’s Industrial Production came in better than estimated for its first rise in 3 months. This coupled with the much higher than expected result in Retail sales shows that the world’s second largest economy is on a recovery path. For now, the Dollar has resistance in the 108.25-40 zone.

• The Pound traded in a very narrow range and is close to breaking back below 1.82. Markets are closed today on both sides of the Atlantic and a light data week should see the Pound taking direction from other majors. Earlier the BBA reported that lending increased slightly compared to the previous month but still way below its outcome from last year.

• The Aussie remains above 0.76 but probably not for long as it is bound to follow the general softness in the European currencies. Like the first week of every month, this is a heavy data week for the Aussie starting with tomorrow’s Current Account balance with deficit expected to widen. 0.7640-55 is the crucial resistance zone to breach for the Aussie.

Economic Data Released

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

Technical Analysis

EUR/USD – Friday’s low was 1.2509 and high was 1.2587.
The pair closed at 1.2582.

The French have rejected the EU constitution as the pair hovers around the crucial 1.25 mark with bottom pickers restricting its losses for now. A decisive break below 1.25 will accelerate losses with next strong support around 1.2455. On the upside mild resistance is around 1.2590 with strong offers on any break above 1.2640.

Key resistance is seen at 1.2590 followed by 1.2640 while support starts at 1.2495 followed by 1.2445.

USD/JPY – Friday’s low was 107.73 and high was 108.07.
The pair closed at 107.89.

The Yen remains within its recent range and continues to yo-yo on the Yuan story with resistance in the 108.25-40 zone followed by strong offers on any move above 108.75. On the downside, mild Dollar bids lie around 107.55 followed by strong buying interest on any break below 107.

Key Resistance is seen at 108.45 followed by 108.75 while support starts at 107.55 followed by 107.05.

GBP/USD – Friday’s low was 1.8203 and high was 1.8272.
The pair closed at 1.8239.

The Pound’s fundamentals remain on the weak side and it slipped below 1.82, support lies in the 1.8140-55 zone followed by strong support around 1.8090. On the upside any foray above 1.8290 should bring in selling interest with strong resistance around 1.8355. Bottom pickers and mild profit taking is keeping it above 1.82 for now but it remains vulnerable.

Key Resistance is seen at 1.8290 followed by 1.8355 while support starts at 1.8155 followed by 1.8090.

AUD/USD – Friday’s low was 0.7583 and high was 0.7633.
The pair closed at 0.7589.

The pair is eyeing key data from both sides for further direction thus on the upside, 0.7640-55 now holds strong resistance with decent selling orders lined up to 0.77. Mild support lies around 0.7575 with strong support in the 0.7525-40 zone. Commodity prices inching higher are lending it a fair degree of support.

Key Resistance is seen at 0.7645 followed by 0.7675 while support starts at 0.7575. followed by 0.7525.

Kunal Sharma
Forex Analyst
E-mail: kunal@easy-forex.com

Australian Financial Services License 246566

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