Australian FOREX Daily Outlook 29/04/2009

US consumers lead rebound

CURRENCY TRADING SUMMARY – 29th April (00:30GMT)

·                U.S. Dollar Trading (USD) weakened in New York but only after testing fresh strength in Asia on swine flu fears. Fears the stress tests will require Citibank and Bank of America to raise more capital sent bank shares lower. Helping general sentiment was the large rise in Consumer Confidence to 39.2 vs. 29.6 previously.   Crude Oil down $0.60 ending the New York session at $49.42 per barrel. In US share markets, the Nasdaq was down 5 points or -0.33% and the Dow Jones was down 8 points or 0.10%. Looking ahead, Q1 GDP forecast at -4.9% vs. -5.3% previously. Also the FED meet and are expected to remain at 0-0.25% band.

·                The Euro (EUR) was able to rebound sharply once again after testing below 1.3000 in Europe. German CPI was flat 0.0%m/m in April. Comments pouring cold water on QE speculation also help buoy the single currency in New York. Overall the EUR/USD traded with a low of 1.2965 and a high of 1.3165 before closing at 1.3145. Looking ahead, April Eurozone Consumer Confidence is forecast at -33 vs. -34 previously.

·                The Japanese Yen (JPY) used the weak Asian stocks to make fresh gains across the board led by the EUR/JPY. USD/JPY broke below 96 yen but found a lot of support below which as sentiment reversed in the US so did the crosses direction. Overall the USDJPY traded with a low of 95.65 and a high of 96.65 before closing the day around 96.50 in the New York session.

  ·              The Sterling (GBP) found support below 1.46 before rebounding on better than expected economic data. CBI Distributive trades at +3 vs. -40 the first positive reading since last year.   Overall the GBP/USD traded with a low of 1.4577 and a high of 1.4773 before closing the day at 1.4675 in the New York session.

·                The Australian Dollar (AUD) tested 0.700 before rebounding overnight as AUD/JPY buyers emerged from the month lows yesterday. Volatile market moods are making it hard to pick direction of the risk based currency. Overall the AUD/USD traded with a low of 0.6990 and a high of 0.7101 before closing the US session at 0.7070. Looking ahead, RBNZ rate call forecast at 2.5% vs. 3%.

·              Gold (XAU) fell sharply in Asia as the USD strengthened breaking back below $900 as demand fizzled. Overall trading with a low of USD$905 and high of USD$885 before ending the New York session at USD$890 an ounce.

·                Euro – 1.3130

Initial support at 1.2866 (Apr 22 low) followed by 1.2732 (Mar 12 low). Initial resistance is now located at 1.3274 (April 27 high) at followed by 1.3301 (Apr 24 high)

·                Yen – 96.50

Initial support is located at 95.43 (Mar 23 low) followed by 94.15 (Mar 23 low). Initial resistance is now at 97.30 (Apr 27 high) followed by 98.15 (Apr 24 high).

·                Pound – 1.4620

Initial support at 1.4398 (Apr 22 low) followed by 1.4241 (Mar 31 low). Initial resistance is now at 1.4817 (Apr 20 high) followed by 1.4942 (Apr 17 high).

·                Australian Dollar – 0.7065

Initial support at 0.6954 (Apr 20 low) followed by the 0.6857 (Apr 1 low). Initial resistance is now at 0.7249 (Apr 20 high) followed by 0.7327 (Apr 13 high).

·                Gold – 891

Initial support at 878 (Apr 21 low) followed by 864 (Apr 17 low). Initial resistance is now at 933 (Apr 1 high) followed by 945 (Mar 26 high).

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