Australian FOREX Daily Outlook 14/08/2006

CURRENCY TRADING SUMMARY –14 AUGUST06 (05:00GMT)

• U.S. Dollar Trading (USD) was stronger against the majors in the overnight foreign exchange trading session as US retail sales rose sharply by 1.4pct in July, better than market estimates hovering around 0.8pct. Excluding autos, retails sales rose by 1.0pct. In other markets, the Dow Jones index fell by 36pts while the NASDAQ fell by 14pts as concerns about economic growth weighed in on the markets. Crude oil rose by US35c to US$74.35 as there seems to be hope of a cease-fire deal between Israel and Hezbollah.
  

• The Euro (EUR) traded within a low of 1.2716 and a high of 1.2798, before closing at 1.2722 in the New York session.
  

• The Japanese Yen (JPY) traded within a low of 115.13 and a high of 116.44 versus the dollar, before closing at 116.30 in the New York session. On the data front, the 2-day BoJ meeting concluded with interest rates left on hold at 0.25% as widely expected.
  

• The Sterling (GBP) traded within a low of 1.8887 and a high of 1.8990, before closing at 1.8908 in the New York session. Looking ahead, UK PPI is due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7650 and a high of 0.7690, before closing at 0.7663 in the New York session.
  

• Gold (XAU) fell by US$2.00 to US$633.00 an ounce after USD strength seen in the overnight session.

TECHNICAL COMMENTARY

• Euro 1.2735

Initial support at 1.2714 (Aug 11 low) followed by 1.2685 (50% ret 1.2456 to 1.2913 and approx Aug 3 low). Initial resistance is now located at 1.2799 (Aug 11 high) followed by 1.2935 (Jun 6 high).

• Yen 116.25

Initial support is located at 115.11 (Aug 11 low) followed by 114.67 (Aug 10 low). Initial resistance is now at 116.45 (Aug 11 high and approx 61.8% ret 117.89 to 113.97) followed by 116.96 (76.4% retracement of 117.89 to 113.97 decline).

• Pound – 1.8930

Initial support at 1.8867 (Aug 10 low) followed by 1.8697 (Aug 3 corrective low). Initial resistance is now at 1.8992 (Aug 11 high) followed by 1.9146 (Apr 8 high).

• Australian Dollar – 0.7665

Initial support at 0.7643 (Aug 10 low) followed by 0.7565 (Aug 9 low). Initial resistance is now at 0.7717 (Aug 10 high) followed by 0.7727 (May 17 corrective high).

• Gold – 628.50

Initial support at 627.15 (Aug 11 low) followed by 602.57 (Jul 24 low). Initial resistance is now at 656.20 (Aug 2 high) followed by 658.96 (76.4%retracement of the 676.35 to 602.66 decline).