Australian FOREX Daily Outlook 28/07/2006

CURRENCY TRADING SUMMARY –28JULY06 (05:00GMT)

• U.S. Dollar Trading (USD) was mostly weaker against the majors in the overnight foreign exchange trading session as US durable goods came in better than expected together with initial jobless claims, and US new home sales fell more than expected. US durable goods rose 3.1pct in June against a consensus of 1.7pct causing a brief rally in the USD. Supporting the USD was initial jobless claims which came in at 298k compared to an estimated of 310k. The rally wasn’t long-lived as new home sales fell to 1.131 million compared to a 1.16 million expectation. In other markets, the Dow Jones index was lower by 2pts while the NASDAQ lost 16pts. Crude oil rose by US52c to US$74.46 a barrel after production problems in Nigeria. Looking ahead, US GDP, PCE deflator, and consumer sentiment is due out today.
  

• The Euro (EUR) traded within a low of 1.2685 and a high of 1.2770, before closing at 1.2698 in the New York session.
  

• The Japanese Yen (JPY) traded within a low of 115.34 and a high of 116.41 versus the dollar, before closing at 115.78 in the New York session. On the data front, household spending came in at -0.9% beating estimates of -1.7% CPI came in at 0.6% which was right on expectations. Unemployment however disappointed coming in at 4.2% from an estimate of 4.0%. On the positive side, retail sales were up 0.4% beating estimates of 0.1%.
  

• The Sterling (GBP) traded within a low of 1.8530 and a high of 1.8675, before closing at 1.8578 in the New York session.
  

• The Australian Dollar (AUD) traded within a low of 0.7607 and a high of 0.7660, before closing at 0.7624 in the New York session.

• Gold (XAU) rose by US$14.50 to US$632.50 an ounce due to geopolitical tension overnight.

TECHNICAL COMMENTARY

• Euro 1.2680

Initial support at 1.2640 (61.8% of 1.2559-1.2772) followed by 1.2559 (Jul 26 reaction low). Initial resistance is now located at 1.2772 (Jul 27 high) followed by 1.2781 (Jul 12 reaction high).

• Yen 116.00

Initial support is located at 115.15 (61.8% retracement of the 113.45 to 117.89 advance) followed by 114.5 (76.4% retracement 113.45 to 117.89). Initial resistance is now at 116.43 (Jul 27 high) followed by 117.41 (Jul 25 reaction high).

• Pound – 1.8550

Initial support at 1.8527 (Jul 27 low) followed by 1.8385 (Jul 25 corrective low). Initial resistance is now at 1.8774 (Jun 6 high) followed by 1.8806 (76.4% retracement of the 1.9027 to 1.8090 decline).

• Australian Dollar – 0.7620

Initial support at 0.7597 (Jul 27 low) followed by 0.7518 (Jul 25 corrective low). Initial resistance is now at 0.7663 (July 27 high) followed by 0.7671 (76.4% retracement of the 0.7795 to 0.7269 decline).

• Gold – 636

Initial support at 623.75 (Jul 27 low) followed by 602.66 (Jul 24 reaction low). Initial resistance is now at 641.0 (Jul 27 high) followed by 648.2 (76.4% retracement of the 676.35 to 602.66 decline).