Australian FOREX Daily Outlook 30/11/2009

UAE Central Bank steps in to help Dubai

CURRENCY TRADING SUMMARY – 30th November (00:30GMT)

U.S. Dollar Trading (USD) was extremely volatile as stock markets around the world went on a roller coaster ride with Asia stocks down over 3% and then European and US stock recovering late in the day. Large stops across the board sent EUR, AUD, Gold and Oil plummeting at the European opening but with Analysts calling the Dubai crisis not as bad as some feared and speculation that Abu Dhabi will step in and help its smaller state, the markets mood recovered from fear and panic. DJIA -154 points closing at 10309, S&amp P -19 points closing at 1091 and NASDAQ -37 points closing at 2138. Looking ahead, November Chicago PMI forecast at 53.7 vs. 54.2 previously.

The Euro (EUR) broke through 1.4900 at the height of the panic and fell quickly to lows of 1.4830 before recovering with Gold and Oil. EUR/JPY was extremely volatile as the pair tracked USD/JPY lower to 127 Yen before recovering to close at 129.50. Overall the EUR/USD traded with a low of 1.4830 and a high of 1.5025 before closing at 1.4990. Looking ahead, November EU Inflation forecast at 0.4% vs. -0.1% previously.

The Japanese Yen (JPY) was very strong with first the 86 Yen level going and then briefly the 85 USD/JPY level was broken. The 85 level has been seen as a line in the sand and prompted a series of Japanese government officials to comment and the price recovered to finish comfortable above the 86 level. GBP/JPY and AUD/JPY tracked the major down and then quickly back up. Overall the USDJPY traded with a low of 84.84 and a high of 87.05 before closing the day around 86.55 in the New York session. Update October Industrial Output at 0.5% vs. 2.5% forecast.

The Sterling (GBP) hit day lows with the Euro to break 1.6400 then 1.6300 before recovering and finishing support above 1.6450. GBP/JPY had another 3+ yen fall but recovered and EUR/GBP found resistance above 0.9100. Overall the GBP/USD traded with a low of 1.6475 and a high of 1.6729 before closing the day at 1.6530 in the New York session. Update November Consumer Confidence at -17 vs. -13 previously.

The Australian Dollar (AUD) was pummeled in Asia and the start of Europe as the risk sensitive currency was sold and stops were hit under the key 0.9000 level. AUD/JPY directed the first sell off and then Gold’s crash led to the second sell off in Europe. Overall the AUD/USD traded with a low of 0.8945 and a high of 0.9120 before closing the US session at 0.9070. Update October Private Sector Credit was 0.0% vs. 0.2% forecast

Oil &amp Gold (XAU) crashed lower on large liquidation of longs and heavy stops being hit at the start of Europe. Overall trading with a low of USD$1137 and high of USD$1191 before ending the New York session at USD$1177 an ounce. Oil traded as low as $72.50 at one stage before recovering in the US session. Crude Oil was down -$0.05 ending the New York session at $75.90.

TECHNICAL COMMENTARY

Euro – 1.5000

Initial support at 1.4802 (Nov 20 low) followed by 1.4702 (Nov 4 low). Initial resistance is now located at 1.5020 (Nov 27 high) followed by 1.5144 (Nov 25 high)

Yen – 86.60

Initial support is located at 85.00 (key level) followed by 84.80 (Nov 27 low). Initial resistance is now at 87.48 (Nov 26 low) followed by 88.01 (Oct 7 former low).

Pound – 1.6495

Initial support at 1.6241 (Oct 19 low) followed by 1.6155 (0.618 of 1.5708-1.6878). Initial resistance is now at 1.6534 (Nov 27 high) followed by 1.6746 (Nov 25 high).

Australian Dollar – 0.9120

Initial support at 0.8907 (Nov 2 low) followed by the 0.8859 (Oct 1). Initial resistance is now at 0.9138 (Nov 27 high) followed by 0.9323 (Nov 25 high).

Gold – 1173

Initial support at 1138 (Nov 27 low) followed by 1127 (Nov 17 high). Initial resistance is now at 1195 (Nov 26) followed by 1200 (Key level).

Oil – 76.20

Initial support at 75.00 (Intraday support) followed by 74.50 (Intraday support). Initial resistance is now at 78 (intraday resistance) followed by 80 (Key level).