FOREX Daily Outlook by Easywayforex.net

ECB and BoE hold in attempt to balance inflation and growth.

CURRENCY TRADING SUMMARY – 09 MAY 2008 (00:30GMT)

• U.S. Dollar Trading (USD) was volatile versus a number of currencies thorough out all session on Thursday. US wholesale inventories data unexpectedly fell for the first time in more than a year in March, while wholesale sales posted a stronger-than-expected rise of 1.6 percent. Stocks rose in U.S. share markets the NASDAQ was 12.75 points (0.52%) whilst the Dow Jones 52.43 points (0.41%). Crude oil traded at another record high on Thursday for the fourth straight day, hitting US$124.61. Oil finished the day up by US$0.16 a barrel to US$123.69. US Trade Balance is scheduled for release today with markets expecting the trade deficit to narrow to -61 billion.
• The Euro (EURO) rebounded as the ECB kept rates on hold at 4.00% and signaled that policy makers were still committed to fighting inflation, although noting that “risks to growth prevail”. Overall the EURUSD traded with a low of 1.5284 and a high of 1.5442 before closing the day at 1.5401 in the New York session.
• The Japanese Yen (JPY) was range bound for much of the session, tracking other majors and equity markets. Overall the USDJPY traded with a low of 103.41 and a high of 104.93 before ending the session at 103.84 in New York.
• The Sterling (GBP) saw the Bank of England also keep rates unchanged at 5.00% as widely expected, in an attempt to balance upside inflation and slowing growth in light of credit turmoil. Overall the GBPUSD traded with a low of 1.9504 and a high of 1.9621 before closing the day at 1.9551 in the New York session.
• The Australian Dollar (AUD) was boosted by strong jobs data in Thursday, despite the Unemployment rate rising from 4.1% to 4.2%. With Employment change jumping to 25,400 new jobs (Forecast: 10,000), The AUD rallied in the Asian session as the Labour force remains healthy. Overall the AUDUSD traded with a low of 0.9350 and a high of 0.9441 before closing the day at 0.9425 in the New York session.
• Gold (XAU) rebounded well on Thursday, as record oil prices pushed the appeal for gold as an inflation hedge. Overall XAU traded with a low of 864.00 and a high of 885.25




Currency Sup 2 Sup 1 Spot Res 1 Res 2
EUR/USD 1.5230 1.5284 1.5405 1.5442 1.5540
USD/JPY 103.23 103.41 103.75 104.96 105.71
GBP/USD 1.9410 1.9503 1.9560 1.9621 1.9736
AUD/USD 0.9342 0.9350 0.9435 0.9510 0.9544
XAU/USD 846.00 864.20 883.00 885.80 896.50



• Euro – 1.5405
Initial support at 1.5284 (May 8 low) followed by 1.5230 (50% retracement of the 1.4440 to 1.6019). Initial resistance is now located at 1.5442 (May 8 high) followed by 1.5540 (May 7 high).

• Yen – 103.75
Initial support is located at 103.41 (May 8 low) followed by 103.23 (Apr 29 low). Initial resistance is now at 104.96 (May 8 high) followed by 105.71 (May 2 low).

• Pound – 1.9560
Initial support at 1.9503 (May 8 low) followed by 1.9410 (Feb 21 low). Initial resistance is now at 1.9621 (May 8 high) followed by 1.9736 (May 7 high).

• Australian Dollar – 0.9435
Initial support a 0.9350 (May 8 low) followed by 0.9342 (May 5 low). Initial resistance is now at 0.9510 (May 6 high) followed by 0.9544 (Apr 23 high).

• Gold – 883.00
Initial support at 863.80 (May 7 low) followed by 846.00 (May 2 low). Initial resistance is now at 885.80 (May 8 high) followed by 896.50 (Apr 25 high).

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