Australian FOREX Daily Outlook 03/08/2006

CURRENCY TRADING SUMMARY –3 AUGUST06 (05:00GMT)

• U.S. Dollar Trading (USD) was broadly firmer in the overnight foreign exchange trading session as market participants booked profits in other currencies. The US ADP employment report showed an additional 99,000 jobs were created in July, down from 368k the month before. In other markets, the Dow Jones index buoyed by strong earnings results rose by 74pts while the NASDAQ rose by 17pts. Crude oil rose by US90c to US$75.81 a barrel on fears that a tropical storm may endanger oil producing installations in the Gulf of Mexico. Looking ahead, the US ISM non-manufacturing survey is due out today.
  

• The Euro (EUR) traded within a low of 1.2777 and a high of 1.2833, before closing at 1.2887 in the New York session. On the data front, the Eurozone PPI came in as expected at 0.2% for June. Looking ahead, retail sales and the ECB announcement on interest rates is due out later today.
  

• The Japanese Yen (JPY) traded within a low of 114.22 and a high of 114.87 versus the dollar, before closing at 114.67 in the New York session.

• The Sterling (GBP) traded within a low of 1.8633 and a high of 1.8794, before closing at 1.8772 in the New York session. Looking ahead, the Bank of England meet today to announce their position on interest rates.
  

• The Australian Dollar (AUD) traded within a low of 0.7635 and a high of 0.7663, before closing at 0.7640 in the New York session.
  

• Gold (XAU) rose by US$5.30 to US$654.10 an ounce spurred on by higher oil prices and regional instability in the Middle East.

TECHNICAL COMMENTARY

• Euro 1.2790

Initial support at 1.272 (Aug 1 reaction low) followed by 1.2659 (Jul 28 reaction low). Initial resistance is now located at 1.2837 (Aug 2 high) followed by 1.2865 (Jul 7 reaction high).

• Yen 114.55

Initial support is located at 114.17 (Jul 31 low) followed by 113.45 (Jul 10 low and 50% ret 108.98 to 117.89). Initial resistance is now at 115.38 (Aug 1 high) followed by 116.04 (Jul 28 high).

• Pound – 1.8780

Initial support at 1.8626 (Aug 1 reaction low) followed by 1.8527 (Jul 27 low). Initial resistance is now at 1.8806 (76.4% retracement of the 1.9027 to 1.8090 decline) followed by 1.8881 (Jun 5 reaction high).

• Australian Dollar – 0.7645

Initial support at 0.7596 (Aug 1 corrective low) followed by 0.7518 (Jul 25 corrective low). Initial resistance is now at 0.7684 (Aug 2 high) followed by 0.7727 (May 17 corrective high).

• Gold – 651

Initial support at 645.5 (Aug 2 low) followed by 626.7 (Jul 28 low). Initial resistance is now at 658.96 (76.4% retracement of the 676.35 to 602.66 decline) followed by 676.53 (Jul 17 high).