Australian FOREX Weekly Outlook 6/04/2009

G20 brings hope and stability

06/04/09                                                                                                                                             

last week’s currency trading review

The Dollar finished the weak sharply lower after an action packed week of events. Stock markets around the globe rallied as the G20 met and discussed further ways to help stoke the world economy. On Friday we had the Non Farm Payrolls dropping -663K vs. -654K forecast. The Unemployment Rate jumped to 8.5% vs. 8.1% previously.   The Euro was under pressure at the start of the week in anticipation of a 0.5% rate cut and possible ‘unconventional measures” out of the ECB meeting. The actual cut of 0.25% and no other action came as a surprise and the market rallied in the weeks close. The EUR/USD gained 1.47% closing at 1.3482, after opening the week at 1.3284. The Japanese Yen broke the 100 level as risk appetite greatly improved with many crosses experiencing 5%+ gains. The USD/JPY gained 2.45% closing at 100.31 after opening at 97.85. The GBP gained the most of the majors as EUR/GBP dropped and GBP/JPY surged. Economic Data improved with all the Manufacturing, Services and Construction PMI’s beating expectations. The GBP/USD gained 3.55% closing at 1.4844 after opening at 1.4317. The AUD jumped higher as stocks and Oil rallied around the world. Retail Sales dropped -2.0% vs. -0.5% forecast but was shrugged off on confidence improvement. The AUD/USD closed up 2.96% at 0.7151 after opening at 0.6939.

The forex trading week preview

In the States On Tuesday we have Consumer Credit (Feb) forecast at -3.0Bn vs. 1.8Bn previously. On Wednesday the FOMC minutes (March) are released. On Thursday the Trade Balance (Feb) is forecast   at -36.5Bn vs. -36Bn previously. Also Released, Weekly Jobless Claims are forecast at 659K vs. 669K previously. Finally the Federal Budget (Mar) is released. Friday is Good Friday and most stock markets will be closed. We will provide our previews and reviews of these data releases in the daily summary.

In the Eurozone On Tuesday the Q4 GDP Final is forecast at -1.5% unrevised. On Wednesday we have German Factory Orders (Feb) forecast at -5.05 vs. -8.0% previously. On Thursday we have German CPI forecast at 0.5% y/y vs. 1.0% y/y previously. In the UK On Tuesday we have Manufacturing Production (Feb) forecast at -1.5% vs. -2.9% previously. On Thursday we have PPI forecast at 0.8% vs. 0.6% previously. Finally on Thursday we have BOE rate decision forecast to remain at 0.5%. We will provide our previews and reviews of these data releases in the daily summary.

In Japan On Thursday we have BOJ target rate forecast to remain at 0.10%. On Thursday we have Machine orders (Feb) forecast at -14.2% vs. -7.0%. We will provide our previews and reviews of these data releases in the daily summary.

In Australia The RBA Rate Decision on Tuesday is the main event with the market expecting a hold at 3.25% although calls for 0.5% are quite widespread. On Thursday we have Unemployment (Mar) forecast to rise to 5.4% vs. 5.2% previously.   We will provide our previews and reviews of these data releases in the daily summary.

·                Euro – 1.3440

Initial support at 1.3224 (Apr 2 low) followed by 1.3113 (Mar 30). Initial resistance is now located at 1.3592 (Mar 27 high) at followed by 1.3678 (Mar 24 high)

·                Yen – 100.30

Initial support is located at 98.23 (Apr 1 low) followed by 97.23 (Mar 31 low). Initial resistance is now at 100.55 (Nov 4 high) followed by 102.41 (Oct 20 high).

·                Pound – 1.4910

Initial support at 1.4450 (Apr 2 low) followed by 1.4241 (Mar 31 low). Initial resistance is now at 1.4915 (Feb 10 high) followed by 1.4986 (Feb 9 high).

·                Australian Dollar – 0.7180

Initial support at 0.6976 (Apr 2 low) followed by the 0.6857 (Apr 1 low). Initial resistance is now at 0.7268 (Jan 7 high) followed by 0.7355 (Oct 7 high).

·                Gold – 880

Initial support at 874 (Jan 28 low) followed by 850 (Key level). Initial resistance is now at 933 (Apr 1 high) followed by 945 (Mar 26 high).

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