Australian FOREX Daily Outlook 27/02/2007

CURRENCY TRADING SUMMARY –27 FEBRUARY 07 (23:30GMT)

• U.S. Dollar Trading (USD) softened against all other majors on Monday. This was on the back of data due for release out of the US expected to warrant an interest rate cut in the near future. Overall the market was in a precautious mood ahead of the large schedule of US economic data this week. In US share markets, the NASDAQ dropped by 10.58 points (-0.42%) whilst the Dow Jones also dropped 15.22 (-0.12%). Crude Oil rose during Monday US$0.35 a barrel US$61.49 on the back of further political uncertainty over the Iran/UN nuclear standoff. Looking ahead, Durable goods orders are due for release with market expecting a significantly softer figure of -2.8% than the previous figure of 2.9%. In other news Consumer Confidence is also set for release today with markets also expecting a slightly softer figure for the month of February. Forecasts are at 109.0 down on the previous 110.30.

• The Euro (EUR) reached a two month high against the dollar on Monday following skepticism over further poor US data. Overall the Euro traded within a range of low 1.3151 and a high 1.3199 before closing 1.3184 in the New York session. Looking ahead the release of the M3 might cause some interest with expectations at 9.4% slightly down on the previous 9.7%.

• The Japanese Yen (JPY) strengthened across the board following recent record lows against the Euro dropping 0.3% to end at 158.82. Overall the JPY traded with a low of 120.35 and a high of 121.11 before closing at 120.56 in the New York session.

• The Sterling (GBP) traded in a narrow range as a lack of UK data saw plenty of sideways trading. Overall the Sterling traded within a range of a low 1.9609 and a high of 1.9662 before closing the day at 1.9641 in the New York session.

• The Australian Dollar (AUD) continued against on the back of a weaker dollar. Overall the AUD traded within a range of a low 0.7910 and a high of 0.7941 before closing at 0.7939 by the New York session. Looking ahead New home sales is due for release with the previous figure being 6.0%

• Gold (XAU) continues to strengthen on the back of further political stand-offs between UN/Iran. Gold rose by US$2.90 an ounce to US$689.60

TECHNICAL COMMENTARY

• Euro 1.3195

Initial support at 1.3079 (Feb 22 low) followed by 1.3074 (Former resistance from Feb 2). Initial resistance is now located at 1.3199 (Feb 26 high) followed by 1.3298 (Jan 2 reaction high).

• Yen 120.55

Initial support is located at 120.32 (61.8% retracement of the 118.98 to 121.65 advance) followed by 120.00 (61.8% retracement of the 118.98 to 121.65 advance). Initial resistance is now at 121.08 (Feb 26 high) followed by 121.65 (Feb 22 high)

• Pound – 1.9640

Initial support at 1.9537 (Feb 23 low) followed by 1.9461 (Feb 22 low). Initial resistance is now at 1.9663 (Feb 26 high) followed by 1.9679 (Feb 15 high)

• Australian Dollar – 0.7940

Initial support at 0.7845 (Feb 19 low) followed by 0.7824 (Feb 15 low). Initial resistance is now at 0.7944 (Feb 26 high) followed by 0.7982 (Jan 3 trend high).

• Gold – 682.30

Initial support at 673.00 (Feb 20 low) followed by 656.40 (Feb 20 low). Initial resistance is now at 688.56 (Feb 23 trend high) followed by 694.70 (May 18 reaction high)