Easy Forex Daily Outlook

Market Summary

Strong Aussie as gold rally and carry trade underpin.

U.S. Dollar Trading (USD) had mixed day with multiple factors pulling and pushing the world's largest currency. News of a large increase in the price of Oil in china sent Crude Oil future down over $5 in anticipation of weakening demand from the emerging powerhouse. Poor economic data had little effect with weekly jobless claims coming in a slightly higher than expected at 381K vs. the 375K forecast. The Philadelphia Fed Manufacturing Index was also weaker at -17.1 vs. economists call for -10. In the US share markets, the NASDAQ was up 32 points (1.33%) and the Dow Jones was up 34 points (0.28%). Crude Oil closed down $5.03 ending the New York session at $131.65 per barrel.

The Euro (EUR) came under pressure yesterday falling against all the majors as Oil fell and a large sell off in Swiss francs weighed. Once again the single currency gravitated towards the 1.5500 level. Overall the EUR/USD traded with a low of 1.5467 and a high of 1.5586 before closing the day at 1.5495 in the New York session. Looking ahead, German PPI m/m is expected to come in at 0.9% for May and ECB President Trichet speaks.

The Japanese Yen (JPY) sharp falls in the Nikkei (-2.33%) yesterday helped the yen gain as risk aversion crept into the market. EUR/JPY broke below 167 and USDJPY fell of the 108 handle. High yielder's bounced as Wall St. recovered led by the GBP/JPY dragging AUS/JPY and NZD/JPY higher. Overall the USDJPY traded with a low of 107.42 and a high of 108.07 before closing the day around 107.86 in the New York session.

The Sterling (GBP) received a massive boost with the May Retail sales seen at it's strongest on record at 3.5% month on month. After last months fall of -0.3% May was expected to come in a little better at -0.1%. Strong clothing numbers caused by large one day sales have been put forward as an explanation. Overall the GBP/USD traded with a low of 1.9580 and a high of 1.9744 before closing the day at 1.9738 in the New York session.

The Australian Dollar (AUD) had a strong day taking advantage a rise in demand for high yielding currencies and a strong rally in Gold. AUD/JPY made new multi month highs consolidating above 102 and shrugging off early stock market weakness. Overall the AUD/USD traded with a low of 0.9448 and a high 0.9518 before closing the day at 0.9517.

Gold (XAU) had a strong rally breaking up through $900 and quickly moving higher to $907.9 before a stabilizing stock market and large fall in Oil retraced most of the gains. Overall trading with a low of USD$884 and high of USD$907.9 ending the New York session at USD$898 an ounce.

Technical Commentary

• Euro - 1.5495

  Initial support at 1.5461 (June 17 low) followed by 1.5303 (June 13 low). Initial resistance is now located 1.5587 (Jun 19 High) at followed by 1.5657 (Jun 10 high).

• Yen - 107.95

  Initial support is located at 106.8 (June 12 low) followed by 106.24 (Jun 10 low). Initial resistance is now at 108.61 (Feb 14 high) followed by 108.98 (Jan 14 high).

• Pound - 1.9705

  Initial support at 1.9580 (June 19 low) followed by 1.9470 (Jun 17 low). Initial resistance is now at 1.9745 (Jun 19 high) followed by 1.9755 (June 10 high)

• Australian Dollar - 0.9500

  Initial support at 0.9304 (50% retracement of the .8953 to 0.9655 advance) followed by 0.9291 (May 15 low). Initial resistance is now at 0.9521 (Jun 19 high) followed by 0.9527 (Jun 10 high).

• Gold - 894

  Initial support at 858 (Jun 12 low) followed by 850 (Psychological Number). Initial resistance is now at 908.65 (June 19 high) followed by 909 (Jun 9 high).