Australian FOREX Daily Outlook 13/11/2006

Euro gains on the USD for the second straight session. PBOC Chief comments weaken the greenback. Oil drops.

CURRENCY TRADING SUMMARY –13 NOVEMBER 06 (23:30GMT)

• U.S. Dollar Trading (USD) was weaker against the majors in the Friday night foreign exchange trading session as the absence of any economic data from the US caused the market to place extra focus on comments from the Chinese Central Bank Governor Zhou Xiaochuan. The PBOC chief stated that China planned to diversify its assets across different currencies and investment instruments, including emerging markets, metals, and oil. In other markets, the Dow Jones index rose by 5pts and the NASDAQ was up 13pts as the drop in the oil price helped industrial and retail stocks. Crude oil fell by US$1.57 to US$59.59 a barrel as the International Energy Agency noted a rise in energy stocks in the top consuming nations and predicted that the need for OPEC oil would decrease. Looking ahead, the US budget is due for release.
  

• The Euro (EUR) traded within a low of 1.2829 and a high of 1.2899, before closing at 1.2849 in the New York session.
  

• The Japanese Yen (JPY) traded within a low of 117.20 and a high of 117.92 versus the dollar, before closing at 117.61 in the New York session. On the data front, Private machinery orders came in at -1.5% for September compared to a 1.9% estimate. Looking ahead, current account is due out today.
  

• The Sterling (GBP) traded within a low of 1.9053 and a high of 1.9177, before closing at 1.9116 in the New York session. Looking ahead, UK PPI is due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7662 and a high of 0.7693, before closing at 0.7671 in the New York session.
  

• Gold (XAU) dropped by US$6.70 to US$630.10 an ounce as traders sought to take profits from previous gains.

TECHNICAL COMMENTARY

• Euro 1.2850

Initial support at 1.2827 (Nov 10 low) followed by 1.2721 (Nov 7 low). Initial resistance is now located at 1.2901 (Nov 10 high) followed by 1.2941 (Aug 21 reaction high).

• Yen 117.50

Initial support is located at 117.18 (Nov 10 low) followed by 116.97 (Nov 1 low). Initial resistance is now at 118.61 (Nov 9 corrective high) followed by 119.67 (Oct 24 high).

• Pound – 1.9115

Initial support at 1.905 (Nov 10 low) followed by 1.8974 (Nov 9 low). Initial resistance is now at 1.9182 (Nov 10 high) followed by 1.9219 (Apr 20, 2005 reaction high).

• Australian Dollar – 0.7665

Initial support at 0.7633 (38.2% retracement of the 0.7414 to 0.7769 advance) followed by 0.7592 (50% retracement of the 0.7414 to 0.7768 advance). Initial resistance is now at 0.771 (Nov 11 high) followed by 0.7769 (Nov 1 high).

• Gold – 628

Initial support at 613.4 (Nov 8 low) followed by 598.5 (Oct 31 low). Initial resistance is now at 636.9 (Nov 10 high) followed by 640.6 (Sep 6 high).