The Forex Profiteer: Daily Forex Outlook

Thursday, August 17, 2006

Daily Forex Outlook - 16th Aug 06

CURRENCY TRADING SUMMARY

U.S. Dollar Trading (USD) further weakened against the majors in the overnight foreign exchange trading session as US CPI numbers came in generally as expected, but housing and industrial production disappointed the forex market. US Headline CPI came in at 0.4% for the month of July, in line with expectations. Core CPI fell to 0.2% from an expected 0.3%. Housing starts for the month of July posted 1.795Mln compared to an estimated 1.805Mln, and Industrial Production fell to 0.4% from 0.8% the previous month, whereas the market was expecting a fall to only 0.5%. In other markets, the Dow Jones index rose by 97pts and the NASDAQ rose by 35pts as the markets viewed the CPI data released last night as positive. Crude oil fell by US$1.16 to US$71.89 a barrel as traders took profit and stocks of crude were in line with expectations. Looking ahead, initial jobless claims and index of leading indicators is due out today.
The Euro (EUR) traded within a low of 1.2772 and a high of 1.2863, before closing at 1.2840 in the New York session. Looking ahead, Eurozone CPI is due out today as well as Industrial Production.
The Japanese Yen (JPY) traded within a low of 115.65 and a high of 116.35 versus the dollar, before closing at 115.87 in the New York session.

The Sterling (GBP) traded within a low of 1.8882 and a high of 1.9023, before closing at 1.8965 in the New York session. Looking ahead, retail sales are due out today.

The Australian Dollar (AUD) traded within a low of 0.7648 and a high of 0.7698, before closing at 0.7680 in the New York session.

Gold (XAU) rose by US$6.10 to US$628.90 an ounce on the back of a weaker greenback.

TECHNICAL COMMENTARY

Euro 1.2845

Initial support at 1.2768 (Aug 16 low) followed by 1.2695 (Aug 15 low). Initial resistance is now located at 1.2867 (Aug 16 high) followed by 1.2913 (Aug 10 corrective high).

Yen 115.80

Initial support is located at 115.63 (Aug 16 low) followed by 115.11 (Aug 11 low). Initial resistance is now at 116.76 (Aug 14 high) followed by 116.96 (76.4% retracement of 117.89 to 113.97 decline).

Pound 1.8960

Initial support at 1.888 (Aug 16 low) followed by 1.8841 (Aug 14 low). Initial resistance is now at 1.9026 (Aug 16 high) followed by 1.9146 (Aug 8 high).

Australian Dollar 0.7680

Initial support at 0.7627 (Aug 16 low) followed by 0.7565 (Aug 9 low). Initial resistance is now at 0.7717 (Aug 10 high) followed by 0.7727 (May 17 corrective high).