Australian FOREX Daily Outlook 09/11/2006

Democrats gain control of House of Representatives. US Dollar recoups some losses against major currencies.

CURRENCY TRADING SUMMARY –9 NOVEMBER 06 (23:30GMT)

• U.S. Dollar Trading (USD) pegged back some recent losses against the majors in the overnight foreign exchange trading session, as results of the legislative election began to trickle through. The Democrats won control of the House of Representatives for the first time since 1994 and so far, it is too close to call in the Senate race. Also, President Bush announced the successor to Defence Secretary Donald Rumsfeld after Rumsfeld announced his resignation. In other markets, the Dow Jones index rose 19pts while the NASDAQ climbed 9pts as investors absorbed the political developments of the day. Crude oil rose US$1.02 to US$59.95 a barrel as US distillate stocks showed a greater than expected drawdown. Looking ahead, US trade balance and consumer sentiment are due out tonight together with further election results for control of the senate.
  

• The Euro (EUR) traded within a low of 1.2746 and a high of 1.2806, before closing at 1.2771 in the New York session. On the data front, the Eurozone finance minister stated that the ECB was seeking to raise interest rates to neutral levels.
  

• The Japanese Yen (JPY) traded within a low of 117.40 and a high of 117.99 versus the dollar, before closing at 117.73 in the New York session.
  

• The Sterling (GBP) traded within a low of 1.9010 and a high of 1.9096, before closing at 1.9056 in the New York session.

• The Australian Dollar (AUD) traded within a low of 0.7680 and a high of 0.7750, before closing at 0.7710 in the New York session. Looking ahead, unemployment is due out today. UPDATE: Aussie unemployment came in at 4.6% beating expectations of 4.8% however, full-time employment fell to -48600 from 36000 previously.
  
• Gold (XAU) fell by US$9.40 to US$618.30 an ounce as the US election result had diminished political uncertainty.

TECHNICAL COMMENTARY

• Euro 1.2760

Initial support at 1.2721 (Nov 7 low) followed by 1.2677 (Oct 31 low). Initial resistance is now located at 1.2834 (Sep 22 high) followed by 1.288 (Aug 31 high).

• Yen 117.80

Initial support is located at 116.97 (Nov 3 low) followed by 116.57 (Nov 1 low). Initial resistance is now at 118.47 (Nov 6 high) followed by 118.74 (Oct 27 high).

• Pound – 1.9050

Initial support at 1.8948 (Nov 6 low) followed by 1.887 (Oct 27 low). Initial resistance is now at 1.9146 (Aug 8 high) followed by 1.9129 (Apr 20, 2005 reaction high).

• Australian Dollar – 0.7700

Initial support at 0.767 (Nov 6 low) followed by 0.7623 (Oct 27 low). Initial resistance is now at 0.7769 (Nov 1 high) followed by 0.7795 (May 11 trend high).

• Gold – 616

Initial support at 614.55 (Nov 2 low) followed by 598.5 (Oct 31 low). Initial resistance is now at 629.8 (Nov 6 high) followed by 640.6 (Sep 6 high).