Australian FOREX Daily Outlook 28/09/2006

CURRENCY TRADING SUMMARY –28 SEPTEMBER06 (01:30GMT)

• U.S. Dollar Trading (USD) weakened against the majors in the overnight foreign exchange trading session as several disappointing data releases pushed the USD down. Durable goods orders for August came in at -0.5% when the market was expecting a 0.5% rise. New homes rose to 1.05 million from an expected 1.04 million and after there was a downward revision in the July result of 1.009million from 1.07 million. The Dow Jones rose by 20pts whereas the NASDAQ gained by 2pts. Crude oil rose sharply by US$1.95 to US$62.96 a barrel as the President of Iran vowed to not give up nuclear technology. Looking ahead, US GDP and initial jobless claims are due out tonight.
  

• The Euro (EUR) traded within a low of 1.2673 and a high of 1.2717, before closing at 1.2701 in the New York session. On the data front, M3 money supply came out at 8.2% compared to 7.5% for the month of August.
  

• The Japanese Yen (JPY) traded within a low of 116.93 and a high of 117.63 versus the dollar, before closing at 117.49 in the New York session. Looking ahead, CPI, unemployment, household spending, and industrial production are all due out tomorrow.
  

• The Sterling (GBP) traded within a low of 1.8856 and a high of 1.8959, before closing at 1.8890 in the New York session. On the data front, GDP came in on expectation for the second quarter at 2.6% and current account came in better than expected at -6.986billion compared to -8billion.
  

• The Australian Dollar (AUD) traded within a low of 0.7474 and a high of 0.7529, before closing at 0.7505 in the New York session.
  

• Gold (XAU) rose by US$6.20 to US$601.00 an ounce amidst squaring of short positions.

TECHNICAL COMMENTARY

• Euro 1.2725

Initial support at 1.263 (Sep 15 reaction low) followed by 1.257 (76.4% retracement of the 1.2456 to 1.2941 advance). Initial resistance is now located at 1.2763 (Sep 26 high) followed by 1.2834 (Sep 22 reaction high).

• Yen 117.35

Initial support is located at 116.06 (Sep 22 low) followed by 115.56 (Sep 5 reaction low). Initial resistance is now at 117.65 (Sep 27 high) followed by 117.77 (Sep 20 high).

• Pound – 1.8905

Initial support at 1.8852 (Sep 27 low) followed by 1.8734 (Sep 18 reaction low). Initial resistance is now at 1.9076 (Sep 25 high) followed by 1.9094 (Aug 31 reaction high).

• Australian Dollar – 0.7510

Initial support at 0.7472 (Sep 27 low) followed by 0.7442 (61.8% retracement of the 0.7269 to 0.7722 rally). Initial resistance is now at 0.7557 (Sep 26 high) followed by 0.7582 (Sep 21 high).

• Gold – 602

Initial support at 582.49 (Sep 25 low) followed by 571.0 (Sep 15 low). Initial resistance is now at 601.9 (Sep 27 high) followed by 607.5 (Aug 18 low).