Australian FOREX Daily Outlook 13/09/2006

CURRENCY TRADING SUMMARY –13 SEPTEMBER06 (05:00GMT)

• U.S. Dollar Trading (USD) surprisingly was stronger against the majors in the overnight foreign exchange trading session even in the face of its worse trade balance result ever. US trade figures for the month of July posted the biggest ever deficit at US$68bln from an estimated deficit of US$65.5bln. The cause of the widening gap was partly due to increased imports of oil considering the high price of oil in July, and an increased demand overall for foreign goods. In other markets, the Dow Jones index rose by 101pts while the NASDAQ rose by 42pts. Crude oil fell by US$1.80 a barrel to US$63.80 as decreased political risk and a lower demand estimate for 2006 by the International Energy Agency helped push prices lower again.
  

• The Euro (EUR) traded within a low of 1.2672 and a high of 1.2732, before closing at 1.2688 in the New York session.
  

• The Japanese Yen (JPY) traded within a low of 117.40 and a high of 118.14 versus the dollar, before closing at 117.95 in the New York session. On the data front, the current account came in better than expected at a 7.1% surplus compared to an expectation of a 3.7% surplus. Looking ahead, capacity utilization and industrial output is due out today.
  

• The Sterling (GBP) traded within a low of 1.8642 and a high of 1.8773, before closing at 1.8738 in the New York session. On the data front, UK CPI impressed for the month of August coming in at 0.4% compared to a 0.3% estimate. Looking ahead, the unemployment rate is due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7504 and a high of 0.7535, before closing at 0.7505 in the New York session.
  

• Gold (XAU) fell by US$3.00 to US$584.30 an ounce as the market sought investments elsewhere.

TECHNICAL COMMENTARY

• Euro 1.2680

Initial support at 1.2641 (61.8% retracement of the 1.2456 to 1.2941 advance) followed by 1.257 (76.4% retracement of the 1.2456 to 1.2941 advance). Initial resistance is now located at 1.2744 (Sep 11 high) followed by 1.2836 (Sep 6 high).

• Yen 117.80

Initial support is located at 116.6 (Sep 11 low) followed by 116.1 (Sep 8 low). Initial resistance is now at 118.16 (Sep 12 high) followed by 118.9 (Apr 11 reaction high).

• Pound – 1.8720

Initial support at 1.8601 (Sep 11 low) followed by 1.8527 (Jul 27 low). Initial resistance is now at 1.8775 (Sep 12 high) followed by 1.8872 (Sep 7 high).

• Australian Dollar – 0.7505

Initial support at 0.7495 (50% retracement of the 0.7269 to 0.7722 rally) followed by 0.7442 (61.8% retracement of the 0.7269 to 0.7722 rally). Initial resistance is now at 0.7549 (Sep 11 high) followed by 0.7601 (Sep 8 high).

• Gold – 584

Initial support at 574.85 (76.4% retracement of the 543.50 to 676.35 advance) followed by 561.0 (Jun 20 low). Initial resistance is now at 599.72 (Sep 12 high) followed by 606.75 (Sep 11 high).