Australian FOREX Daily Outlook 29/08/2006

CURRENCY TRADING SUMMARY –29 AUGUST06 (05:00GMT)

• U.S. Dollar Trading (USD) edged slightly lower against the majors in the overnight forex session as the market awaits the FOMC minutes from the August 8^th meeting to better gauge the interest rate policy going forward. In other markets, the Dow Jones index rose by 68pts while the NASDAQ rose by 20pts as a falling oil price lowered fears of high inflation. Crude oil fell by US$1.90 to US$70.61 a barrel as tropical storm Ernesto lost intensity and veered away from important oil rig installations in the Gulf of Mexico. Looking ahead, consumer confidence is due out today together with the FOMC minutes of the August 8^th Federal Reserve meeting.
  

• The Euro (EUR) traded within a low of 1.2756 and a high of 1.2821, before closing at 1.2779 in the New York session. On the data front, M3 money supply came in less than expected at 7.8% compared to an 8.3% estimate.
  

• The Japanese Yen (JPY) traded within a low of 116.87 and a high of 117.33 versus the dollar, before closing at 117.22 in the New York session. On the data front, the unemployment rate came in as expected at 4.1%, and household spending came in a little worse than expected at -1.3% from a -0.8% expectation but none the less better than the previous result of -2.2%. Looking ahead, Retail sales are due out tomorrow.
  

• The Sterling (GBP) traded within a low of 1.8863 and a high of 1.8991, before closing at 1.8935 in the New York session. Looking ahead, mortgage approvals are due out tomorrow.
  

• The Australian Dollar (AUD) traded within a low of 0.7570 and a high of 0.7600, before closing at 0.7585 in the New York session. Looking ahead, retails sales are due out tomorrow.
  
• Gold (XAU) fell by US$6.90 to US$614.80 an ounce in response to weaker oil prices.

TECHNICAL COMMENTARY

• Euro 1.2790

Initial support at 1.2723 (Aug 25 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 117.20

Initial support is located at 116.42 (Aug 25 low) followed by 116.09 (Aug 23 low). Initial resistance is now at 117.87 (July 19 high) followed by 118.22 (Apr 18 high).

• Pound – 1.8950

Initial support at 1.883 (Aug 25 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 – 0.7590

Initial support at 0.7546 (38.2% retracement of the 0.7269 to 0.7717 advance) followed by 0.7489 (Jul 20 low). Initial resistance is now at 0.7673 (Aug 23 high) followed by 0.7702 (Aug 16 high).

• Gold – 615

Initial support at 613.14 (Aug 28 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).