Australian FOREX Daily Outlook 23/11/2006

USD weakens considerably ahead of Japanese and US holidays. Consumer sentiment falls, jobless claims rise. Gold grinds higher.

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

• U.S. Dollar Trading (USD) fell substantially against the majors in the overnight forex session as the absence of any data from the US and the looming US public holiday meant thin trading and exaggerated moves against the greenback. US jobless claims rose to 321k above forecasts of 310k. US consumer sentiment was 92.1 for November less than the market expectation of 93.1. In other markets, the Dow Jones rose by 5pts and the NASDAQ rose by 11pts ahead of Thanksgiving Day. Crude oil fell by US89c to US$59.28 a barrel as larger than expected rises in gasoline inventories in the last week helped push prices lower. Looking ahead, the US enjoys Thanksgiving Day Holiday.
  

• The Euro (EUR) traded within a low of 1.2840 and a high of 1.2958, before closing at 1.2927 in the New York session. On the data front, industrial orders for the month of September posted a better result than expected coming in at -1.3% compared to a -2% estimate. Looking ahead, IFO business climate is due out tonight.
  

• The Japanese Yen (JPY) traded within a low of 116.38 and a high of 117.92 versus the dollar, before closing at 116.74 in the New York session. On the data front, Japan enjoys Labour Day Thanksgiving holidays.
  

• The Sterling (GBP) traded within a low of 1.8992 and a high of 1.9167, before closing at 1.9137 in the New York session. On the data front, the BoE MPC minutes showed that two members opposed the move to raise interest rates.
  

• The Australian Dollar (AUD) traded within a low of 0.7707 and a high of 0.7761, before closing at 0.7758 in the New York session.
  

• Gold (XAU) rose by US$1.20 to US$629.90 an ounce on the back of a weak USD.

TECHNICAL COMMENTARY

• Euro 1.2935

Initial support at 1.2798 (Nov 21 low) followed by 1.2761 (Nov 17 low). Initial resistance is now located at 1.2941 (Aug 21 reaction high) followed by 1.298 (Jun 5 trend high).

• Yen 116.75

Initial support is located at 116.57 (Nov 1 low) followed by 116.06 (Sep 29 low). Initial resistance is now at 118.27 (Nov 21 high) followed by 118.61 (Nov 9 corrective high).

• Pound – 1.9140

Initial support at 1.8932 (Nov 20 low) followed by 1.8835 (Nov 17 low). Initial resistance is now at 1.9182 (Nov 10 trend high) followed by 1.92 (Psychological resistance).

• Australian Dollar – 0.7750

Initial support at 0.7675 (Nov 20 low) followed by 0.7642 (Nov 16 low). Initial resistance is now at 0.7769 (Nov 1 reaction high) followed by 0.7795 (May 11 reaction high).

• Gold – 629

Initial support at 621 (Nov 20 low) followed by 614.8 (Nov 17 low). Initial resistance is now at 629.5 (Nov 14 high) followed by 636.9 (Nov 10 high).