Australian FOREX Daily Outlook 25/08/2006

CURRENCY TRADING SUMMARY –25 AUGUST06 (05:00GMT)

• U.S. Dollar Trading (USD) gained against the majors in the overnight forex trading session as data coming out of the US was generally unimpressive. US new home sales fell to 1.072million from a 1.1million estimate. US durable goods also disappointed falling -2.4% compared to a -0.5% forecast. On a positive note, initial jobless claims came in at 313k from a 315k estimate. In other markets, the Dow Jones index ended around 6.5pts higher while the NASDAQ ended only 2.5pts higher as concerned investors absorbed the soft housing and durable goods orders. Crude oil rose by US40c to USD$72.30 a barrel as reports were released of possible sanctions against Iran. Looking ahead, Federal Reserve Chairman Bernanke delivers a speech on the economy tonight.
  

• The Euro (EUR) traded within a low of 1.2753 and a high of 1.2842, before closing at 1.2764 in the New York session. On the data front, the IFO business climate came in better than expected at 105 compared to a 104.8 estimate.
  

• The Japanese Yen (JPY) traded within a low of 116.21 and a high of 116.60 versus the dollar, before closing at 116.53 in the New York session. On the data front, Nationwide CPI came in worse than expected at 0.2% compared to the 0.5% estimate.
  

• The Sterling (GBP) traded within a low of 1.8877 and a high of 1.8973, before closing at 1.8874 in the New York session. Looking ahead, UK GDP is due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7607 and a high of 0.7640, before closing at 0.7610 in the New York session.
  

• Gold (XAU) fell by US$4.50 to US$618.50 an ounce after strength seen in the greenback.

TECHNICAL COMMENTARY

• Euro 1.2760

Initial support at 1.275 (Aug 24 low) followed by 1.2695 (Aug 15 low). Initial resistance is now located at 1.2854 (Aug 23 high) followed by 1.2941 (Aug 21 high).

• Yen 116.45

Initial support is located at 115.82 (Aug 22 low) followed by 115.18 (Aug 17 low). Initial resistance is now at 116.85 (Aug 22 high) followed by 117.41 (Jul 25 high).

• Pound – 1.8875

Initial support at 1.8855 (Aug 22 low) followed by 1.8775 (Aug 18 low). Initial resistance is now at 1.8999 (Aug 21 high) followed by 1.9026 (Aug 16 high).

• Australian Dollar – 0.7610

Initial support at 0.7562 (Aug 17 low) followed by 0.7546 (38.2% retracement of the 0.7269 to 0.7717 advance). Initial resistance is now at 0.7673 (Aug 23 high) followed by 0.7702 (Aug 16 high).

• Gold – 620

Initial support at 613.9 (Aug 21 low) followed by 607.67 (Aug 18 low). Initial resistance is now at 630.5 (Aug 23 high) followed by 633.1 (Aug 14 high).