The Forex Profiteer: Daily Forex Outlook

Tuesday, August 15, 2006

Daily Forex Outlook - Tues 15th August

CURRENCY TRADING SUMMARY

U.S. Dollar Trading (USD) was marginally higher against the majors in the overnight forex trading session as the cease-fire in the Middle Eats helped to relieve geopolitical tensions in the area. In other markets, the Dow Jones rose by 10pts while the NASDAQ rose by 11pts as any gains were capped by concerns in energy prices and their effect on the energy sector. Crude oil fell by US82c a barrel to USD$ 73.53 as the truce between Israel and Hezbollah came into effect together with the announcement by BP that it would keep 50% of its Prudhoe Bay facility open as it undergoes repairs of its pipeline. Looking ahead, US PPI is due out tonight with the market expecting a fall in the core figure to 1.7% from 1.9% previously.
The Euro (EUR) traded within a low of 1.2711 and a high of 1.2716, before closing at 1.2722 in the New York session. On the data front, Eurozone GDP came in stronger than expected at 0.9% for the quarter compared to an estimate of 0.7%.
The Japanese Yen (JPY) traded within a low of 116.20 and a high of 116.68 versus the dollar, before closing at 116.71 in the New York session. Looking ahead, BoJ minutes for the July 13-14 meeting are due out tomorrow. On the data front, Japan’s tertiary index came in at -0.6%, worse than the expected -0.2%.

The Sterling (GBP) traded within a low of 1.8846 and a high of 1.8949, before closing at 1.8893 in the New York session. On the data front, UK PPI input came in stronger than the expected rate of 1% at 1.1% for July.

The Australian Dollar (AUD) traded within a low of 0.7590 and a high of 0.7622, before closing at 0.7590 in the New York session.

Gold (XAU) fell by US$5.10 to US$626.90 an ounce after cease-fire came into effect in the Middle East.

TECHNICAL COMMENTARY

Euro 1.2725

Initial support at 1.2706 (Aug 14 low) followed by 1.2685 (50% ret 1.2456 to 1.2913 and approx Aug 3 low). Initial resistance is now located at 1.2799 (Aug 11 high) followed by 1.2913 (Aug 10 corrective high).

Yen 116.55

Initial support is located at 116.15 (Aug 14 low) followed by 115.11 (Aug 11 low). Initial resistance is now at 116.96 (76.4% retracement of 117.89 to 113.97 decline) followed by 117.41 (Jul 25 high).

Pound 1.8885

Initial support at 1.8841 (Aug 14 low) followed by 1.8775 (38.2% retracement of the 1.8176 to 1.9146 rally). Initial resistance is now at 1.8953 (Aug 14 high) followed by 1.8992 (Aug 11 high).

Australian Dollar 0.7595

Initial support at 0.7565 (Aug 9 low) followed by 0.7546 (38.2% retracement of the 0.7269 to 0.7717 advance). Initial resistance is now at 0.7682 (Aug 14 high) followed by 0.7717 (Aug 10 high).