Australian FOREX Daily Outlook 20/09/2006

CURRENCY TRADING SUMMARY –20 SEPTEMBER06 (05:00GMT)

• U.S. Dollar Trading (USD) was softer against the majors in the overnight foreign exchange trading session as a softer US housing market and producer prices weakened the greenback upon their release. Housing starts posted a result of 1.665million compared to an estimated 1.75million and build permits came in at 1.722million compared to a 1.745million estimate. US PPI was weaker than expected at 0.1% compared to a 0.2% estimate. In other markets, the Dow Jones index fell by 14pts and the NASDAQ fell by 13pts as news of the military coup in Thailand shook investors. Crude oil fell by US$2.14 a barrel to US$61.66 as adequate supplies are predicted for the Northern winter. Looking ahead, the FOMC interest rate announcement is due out tonight.
  

• The Euro (EUR) traded within a low of 1.2652 and a high of 1.2725, before closing at 1.2677 in the New York session. Looking ahead, Eurozone current account is due out tomorrow.
  

• The Japanese Yen (JPY) traded within a low of 117.01 and a high of 118.10 versus the dollar, before closing at 117.75 in the New York session.

• The Sterling (GBP) traded within a low of 1.8775 and a high of 1.8886, before closing at 1.8811 in the New York session. Looking ahead, the MPC minutes from September 7 are due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7510 and a high of 0.7570, before closing at 0.7520 in the New York session
  
• Gold (XAU) fell by US$9.60 to US$573.20 an ounce as oil dropped in the overnight session.

TECHNICAL COMMENTARY

• Euro 1.2715

Initial support at 1.263 (Sep 15 low) followed by 1.257 (76.4% retracement of the 1.2456 to 1.2941 advance). Initial resistance is now located at 1.2755 (Sep 14 high) followed by 1.2836 (Sep 6 high).

• Yen 117.90

Initial support is located at 116.99 (Sep 19 low) followed by 116.6 (Sep 11 low). Initial resistance is now at 118.3 (Sep 18 high) followed by 118.9 (Apr 11 reaction high).

• Pound – 1.8810

Initial support at 1.8734 (Sep 18 low) followed by 1.8601 (Sep 11 low). Initial resistance is now at 1.892 (Sep 14 high) followed by 1.8978 (76.4% retracement of the 1.9094 to 1.8601 decline).

• Australian Dollar – 0.7550

Initial support at 0.7482 (Sep 13 low) followed by 0.7442 (61.8% retracement of the 0.7269 to 0.7722 rally). Initial resistance is now at 0.7576 (Sep 19 high) followed by 0.7601 (Sep 8 high and 50% ret 0.7722 to 0.7482 decline).

• Gold – 587

Initial support at 571 (Sep 15 low) followed by 561.0 (Jun 20 low). Initial resistance is now at 595.35 (Sep 14 high) followed by 599.9 (Sep 12 high).