Australian FOREX Daily Outlook 23/06/2006

MARKET SUMMARY –23JUNE06 (05:00GMT)

• The Dollar strengthened considerably against the major currencies in the overnight session as market participants fled from emerging currencies and sought the relative safe haven of the greenback. Instability in Japan also added to the dollar strength, as calls for BoJ Governor Fukui to step down amidst allegations he was involved in a controversial equity fund hampered any rise in the Yen. Also, with the regional instability over North Korea and their possible testing of an ICBM, the dollar rallied further against the majors. In other markets, the Dow Jones fell by 60pts and the NASDAQ fell by 18pts as investors maintained their fears of slowing economic growth together with a hike in interest rates. Crude oil lifted, buoyed by increased demand rising US51c to US$70.84 a barrel. Looking ahead, US durable goods orders are due out today.
  

• The Euro traded in a range of 1.2551 to 1.2679, before closing at 1.2579 in the New York session.
  

• The Japanese yen traded in a range of 114.68 to 116.28 versus the dollar, before closing at 116.12 in the New York session.
  

• The Sterling traded in a range of 1.8264 to 1.8468, before closing at 1.8280 in the New York session.
  

• The Aussie traded in a range of 0.7340 to 0.7410, before closing at 0.7336 in the New York session.

• Gold fell by US$5.60 to US$585.40 an ounce following a stronger dollar and fears that an economic slowdown may affect commodities.

Initial support at 0.7321 (June 22 low) followed by 0.7313 (61.8% retracement of 0.7015 to 0.7795 advance). Initial resistance is now at 0.745 (June 16 high) followed by 0.7505 (June 9 corrective high).