Australian FOREX Daily Outlook 09/08/2006

CURRENCY TRADING SUMMARY –9 AUGUST06 (05:00GMT)

• U.S. Dollar Trading (USD) weakened against the majors in the overnight foreign exchange trading session as the US Federal Reserve decided to leave rates on hold after rate hikes spanning over 2 years. Although commentary after their decision stated that “inflation pressures seem likely to moderate over time,” they did however leave the opportunity open for further rate hikes if future data releases warranted it. In other markets, the Dow Jones fell by 46pts while the NASDAQ fell by almost 12pts as the markets digested accompanying statements from the Federal Reserve concerning their decision to leave rates on hold but leaving open the chance of hiking in future. Crude oil fell by US76c to US$76.31 a barrel as BP said that it was taking measure to prevent a complete shutdown of its oilfields in Alaska. Also, OPEC announced they would be willing to make up any shortfall in supply due to the pipeline closure in Alaska. Looking ahead, US trade balance and initial jobless claims are due out tomorrow.
  

• The Euro (EUR) traded within a low of 1.2814 and a high of 1.2892, before closing at 1.2833 in the New York session.
  

• The Japanese Yen (JPY) traded within a low of 114.61 and a high of 115.30 versus the dollar, before closing at 115.30 in the New York session. Looking ahead, machinery orders are due out today.
  

• The Sterling (GBP) traded within a low of 1.9037 and a high of 1.9140, before closing at 1.9056 in the New York session. Looking ahead, UK trade balance is due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7585 and a high of 0.7638, before closing at 0.7592 in the New York session.
  
• Gold (XAU) fell by US$3.00 to US$645 an ounce as oil prices fell and as a result of the Federal Reserve announcement after their interest rates decision.

TECHNICAL COMMENTARY

• Euro 1.2785

Initial support at 1.2737 (38.2% ret 1.2456 to 1.2911 and approx Aug 3 low) followed by 1.272 (Aug 1 corrective low). Initial resistance is now located at 1.2911 (Aug 4 corrective high) followed by 1.2935 (Jun 6 high).

• Yen 115.55

Initial support is located at 113.97 (Jul 10 low and 50% ret 108.98 to 117.89) followed by 113.45 (Jul 10 low and 61.8% ret 108.98 to 117.89). Initial resistance is now at 115.56 (Aug 4 high) followed by 116.04 (Jul 28 high and 50% ret 117.89 to 114.17).

• Pound – 1.8995

Initial support at 1.8852 (Aug 4 low) followed by 1.8697 (Aug 3 corrective low). Initial resistance is now at 1.9146 (Aug 8 high) followed by 1.9162 (Apr 29 corrective high).

• Australian Dollar – 0.7575

Initial support at 0.7577 (38.2% retracement of the 0.7405 to 0.7684 advance) followed by 0.7512 (61.8% retracement of the 0.7405 to 0.7684 advance). Initial resistance is now at 0.7684 (Aug 2 corrective high) followed by 0.7727 (May 17 corrective high).

• Gold – 641

Initial support at 639.4 (Aug 3 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).