Australian FOREX Daily Outlook 02/06/2008

USD consolidates gains into the weekend on solid Economic Data.

·                U.S. Dollar Trading (USD) gave a little back on Friday after a week of strong gains. US Data on Friday came is mostly as expected with Core PCE price index coming at 0.2% m/m, Personal spending 0.2% m/m and personal income 0.2% m/m. Stronger Chicago PMI of 49.1 vs 48.5 expected had a muted reception as did a positively revised Michigan Consumer sentiment of 59.8. In US share markets the NASDAQ was up 14.34 points (0.57%) and the Dow Jones was down slightly 7.9 points (-0.06%). Crude Oil closed up $0.73 ending the New York session at $127.35 per barrel. Looking ahead, ISM Manufacturing Index and ISM Manufacturing Prices are out today.   

·                The Euro (EURO) traded at weekly lows after April German Retail Sales came in much lower at -1.7% vs. 0.6% expected. The single currency rebounded with commodities late in the day helped by stronger Euro-zone CPI flash estimates of 3.6% vs. 3.5% forecasted. Overall the EUR/USD traded with a low of 1.5461 and a high of 1.5570 before closing the day at 1.5555 in the New York session. Looking ahead, ECB president Trichet speaks today at the Central Bank’s 10^th Anniversary conference. 

·                The Japanese Yen (JPY) was little changed after relatively weak data on Friday. Figures made public included Core April CPI coming in at 0.9% vs. 1.0% expected and April Unemployment rate coming in higher at 4.0% vs 3.9% forecasted. USDJPY traded with a low of 105.23 and a high of 105.74 before closing the day around 105.50 in the New York session. 

·                The Sterling (GBP) gapped lower Monday morning on weekend reports that a Large UK lender Bradford and Bingley will issue a profit warning and its Chief executive will resign. On the data front, GFK consumer confidence came in at -29 vs. -25 forecasted. Overall the GBP/USD traded with a low of 1.9683 and a high of 1.9824 before closing the day at 1.9822 in the New York session. Looking ahead, Halifax House Price Index and Manufacturing PMI out today.

·                The Australian Dollar (AUD) traded in a tight range below 96 cents on broadly stronger greenback, although any further downside moves were limited as XAU rebounded by $10. AUDJPY was generally supported consolidating above the 100 level. Overall the AUDUSD traded with a low of 0.9510 and a high of 0.9571 before closing the day at 0.9555 in the New York session. Looking Ahead, April Retail Sales m/m expected at 0.2% along with TDMI inflation gauge.

·              Gold (XAU) gained after heavy losses during the weak up $10.10 an ounce. Overall trading with a low of $870 and high of $888.50 ending the New York session at $887.30 an ounce.

TECHNICAL COMMENTARY                                                     

Currency	Sup 2	Sup 1	Spot	Res 1	Res 2
EUR/USD	1.5410	1.5462	1.5555	1.5669	1.5761
USD/JPY	103.89	104.61	105.50	105.88	106.55
GBP/USD	1.9614	1.9685	1.9740	1.9852	1.9870
AUD/USD	0.9430	0.9511	0.9550	0.9581	0.9639
XAU/USD	860.50	870.45	887.00	909.85	930.90

·                Euro – 1.5555

Initial support at 1.5462 (May 30 low) followed by 1.5410 (May 6 resistance). Initial resistance is now located 1.5669 (May 29 High) at followed by 1.5761 (May 28 high).

·                Yen – 105.50

Initial support is located at 104.61 (May 29 low) followed by 103.89 (May 28 low). Initial resistance is now at 105.88 (May 29 high) followed by 106.65 (Feb 28 high).

·                Pound – 1.9740

Initial support at 1.9674 (May 29 low) followed by 1.9614 (May 21 low). Initial resistance is now at 1.9852 (May 23 high) followed by 1.987 (76.4% retracement of 2.00027-1.9363)

·                Australian Dollar – 0.9550

Initial support a 0.9510 (May 30 low) followed by 0.9543 (61.8% retracement 0.9291 to 0.9655). Initial resistance is now at 0.9581 (May 30 high) followed by 0.9639 (May 29 high).

·                Gold – 887

Initial support at 870.45 (May 30 low) followed by 860.5 (May 14 low). Initial resistance is now at 909.85 (May 28 high) followed by 930.9 (May 27 high).