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Australian FOREX Daily Outlook 15/05/2007

Technical trading on majors to begin the week. Spotlight on US CPI data, a key measure of inflationary pressures.

                                                                                                                                                                                                                                     

CURRENCY TRADING SUMMARY –  15 MAY 07 (23:30GMT)
                                                                     

  • U.S. Dollar Trading (USD) was mixed against other majors to begin the week on Monday. With the absence of key data, many currency pairs traded in tight technical ranges. In U.S. share markets, the NASDAQ fell by -15.78 points (-0.61%) whilst the Dow Jones gained moderately by 20.56 points (+0.15%). Crude oil rose slightly by US$0.09 a barrel to US$62.46. Looking ahead, key data is set for release out of states today with CPI sure to generate plenty of interest. With recent comments made by Fed officials that the immediate outlook on inflationary pressures are unlikely to moderate, investors will be in eager anticipation to see if data may support such statements. Economists are confident that the Core CPI figure m/m will be released at 0.2% for the month of April (Prior: 0.1%). In other news, NY Fed Manufacturing survey will also be made public with expectations of the index to be released at 8 (Prior: 3.8). Finally, TIC flows (Mar) always poses as an important data release with economists awaiting a figure of 75 bln stronger than the previous 58.1 bln.        

                                                                                                                                                                                                                                         

  • The Euro (EUR) was little changed on Monday on the back of technical trading and market cautiousness ahead of U.S. CPI data. Eurozone Industrial Production was released on consensus at 3.7 for the y/y. Overall the EUR traded with a range of a low 1.3525 and a high of 1.3558 before closing the day at 1.3540 in the New York session. Looking ahead, GDP (Q1) is expected to come in at 0.4% down on the previous 0.9%.        

 

  • The Japanese Yen (JPY) eased on Monday against the USD. Focus remains on the Japanese markets with a heavy slate of data including a BoJ rate announcement. Overall the JPY traded with a range of a low 120.04 and a high of 120.16 before closing the day at 120.29 in the New York session. Looking ahead, data in the shape of Machine Orders may generate movement on the USDJPY (Forecast: 1.3% Prior: -5.2%). UPDATE: Actual: -4.5 %    

 

  • The Sterling (GBP) eased on the back of a worse off UK PPI data for the month of April coming in at 0.1%, softer than the forecasted 0.3 (Previous revised lower at 0.3%). Overall the GBP traded with a low of 1.9782 and a high of 1.9845 before closing the day at 1.9783 in the New York session. Looking ahead, the UK CPI m/m for the month of April will be released on Tuesday with forecasted expectations of a 0.3% rise from the previous 0.5%. In further key data, Retail Sales will also be made public for the month of April with expectations of a 0.5% figure (Prior: 0.6%)        

 

  • The Australian Dollar (AUD) rallied in the early part of the Asian session of trading largely attributed to positive retail sales data out of NZ, before easing from session highs late r in the day. Overall the AUD traded with a range of a low 0.8315 and a high of 0.8352 before closing at 0.8323 in the New York session.    

 

  • The Turkish Lira (TRY) rose to as much as 1.3300 against the USD in off market hours of   trade, closing at 1.3341 on the inter-bank market

 

  • Gold (XAU) was volatile on Monday fluctuating in wide range of 666.70 and 675.10. Gold eased by US$2.20 an ounce to close at $670.10

 

TECHNICAL COMMENTARY                                                     

                                                                                                                                         

                                                                                                                                                     

                                                                                                                     

                     

Currency Sup 2 Sup 1 Spot Res 1 Res 2
EUR/USD 1.3371 1.3462 1.3545 1.3565 1.3629
USD/JPY 119.06 119.47 120.45 120.55 121.65
GBP/USD 1.9659 1.9760 1.9800 1.9882 1.9964
AUD/USD 0.8204 0.8230 0.8325 0.8362 0.8383
XAU/USD 656.23 664.85 669.70 680.90 693.80

                     

 

  • Euro 1.3545

Initial support at 1.3462 (May 11 low) followed by 1.3371 (38.2% retracement of the 1.2865 to 1.3683 advance). Initial resistance is now located at 1.3565 (May 10 high) followed by 1.3629 (May 7 high)

                                                                               

  • Yen 120.45

Initial support is located at 119.47 (May 11 low) followed by 119.06 (May 1 low). Initial resistance is now at 120.55 (May 10 high) followed by 121.65 (Feb 22 reaction high)

 

  • Pound – 1.9800

Initial support at 1.9760 (May 11 low) followed by 1.9659 (50% retracement of the 1.9184 to 2.0134 advance). Initial resistance is now at 1.9882 (Former May 9 low) followed by 1.9964 (May 10 high)

 

  • Australian Dollar – 0.8325

Initial support a 0.8230 (May 11 low) followed by 0.8204 (May 7 low). Initial resistance is now at 0.8362 (Apr 26 high) followed by 0.8383 (Apr 23 high)

 

  • Gold – 669.70

Initial support at 664.85 (May 10 low) followed by 656.23 (50% retracement of 633.00 to 693.80 advance). Initial resistance is now at 680.90 (May 10 high) followed by 693.80 (Apr 23 high)

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