Australian FOREX Daily Outlook 30/11/2006

Currencies consolidate with mixed data released from the US. Oil rises and gold pulls back from recent highs.

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

• U.S. Dollar Trading (USD) was mixed against the majors in the overnight forex trading session as a mixed bag of data was released from the US. Core inflation was revised down from 2.3% to 2.2% and new home sales fell to 1.004mln in October from a 1.044mln estimate. US Q3 GDP was revised up from 1.8% to 2.2% compared to a forecast of 1.6%. The Beige Book reported moderate growth across most US regions with home sales softening and the labour market remaining tight. In other markets, the Dow Jones index rose by 90pts and the NASDAQ rose 19pts. Crude oil rose by US$1.49 to US$62.50 a barrel as an unexpected decline in oil supplies was submitted to the market. Looking ahead, initial jobless claims, core PCE index, and Chicago PMI are due out tonight.

• The Euro (EUR) traded within a low of 1.3130 and a high of 1.3218, before closing at 1.3145 in the New York session.

• The Japanese Yen (JPY) traded within a low of 115.89 and a high of 116.47 versus the dollar, before closing at 116.41 in the New York session. On the data front, manufacturing PMI came in softer than the previous result of 54.1 at 53.7. Looking ahead, Unemployment and CPI are due out tomorrow.

• The Sterling (GBP) traded within a low of 1.9470 and a high of 1.9544, before closing at 1.9447 in the New York session. Looking ahead, GfK consumer confidence is due out today.

• The Australian Dollar (AUD) traded within a low of 0.7820 and a high of 0.7854, before closing at 0.7833 in the New York session. On the data front, retail sales came in at 0.8% from an expected 0.4%.

• Gold (XAU) fell by US$5.10 to US$635.50 an ounce in response to stronger US economic growth and lower inflation.

TECHNICAL COMMENTARY

• Euro 1.3150

Initial support at 1.3086 (Nov 27 reaction low) followed by 1.298 (Jun 5 high and former key breakout point). Initial resistance is now located at 1.3219 (Nov 29 trend high) followed by 1.344 (Mar 16, 2005 high).

• Yen 116.45

Initial support is located at 115.38 (Nov 27 low) followed by 115.18 (Aug 17 low). Initial resistance is now at 116.83 (Nov 23 low &amp neckline of head &amp shoulders pattern) followed by 117.12 (Nov 13 high).

• Pound – 1.9460

Initial support at 1.9306 (Nov 27 reaction low) followed by 1.9182 (Nov 10, 20005 low). Initial resistance is now at 1.9551 (Nov 24 high) followed by 1.9578 (Potential channel top).

• Australian Dollar – 0.7835

Initial support at 0.7731 (Nov 23 low) followed by 0.7705 (Nov 22 low). Initial resistance is now at 0.7855 (Nov 29 trend high) followed by 0.7925 (11/2-month potential channel resistance).

• Gold – 638

Initial support at 630.86 (Trend line support) followed by 614.8 (Nov 17 low). Initial resistance is now at 642.2 (Nov 28 high) followed by 645 (Aug 11 high).