Australian FOREX Daily Outlook 04/09/2007

US Market Holiday keeps currencies range bound. ISM Manufacturing and EZ GDP key data releases.

CURRENCY TRADING SUMMARY –04 SEPTEMBER 2007 (00:30GMT)

• U.S. Dollar Trading (USD) was steady to begin with a volume filled data week scheduled. Economic data listed is expected to outline the extent of the credit market turmoil. Other wise trading was minimal during the New York session due to Labour Day holiday. Looking ahead, the data calendar begins with Manufacturing ISM which is expected to be released at 53 for the month of August, down from the previous 53.8. Such a decline would suggest continued growth in August, yet at a slower pace

• The Euro (EUR) was also steady to begin the week in a thin trading session due to U.S. holidays, hence trading in a tight range. In data news the PMI Manufacturing for the month of August was released relatively on consensus if not slightly higher. Overall the EURUSD traded with a range of a low 1.3609 and a high of 1.3655 before closing the day at 1.3610 on the New York session. Looking ahead GDP Q2 data is set for release on Tuesday, with analyst expecting figures of 0.3%/2.5% from the previous 0.7%/3.1%, giving further indication of a slowing economy, which will be most critical to Thursday’s rate announcement. In other data, the PPI for the month of July will also create plenty of interest (Forecast: 0.1% Previous: 0.1%).

• The Japanese Yen (JPY) was range bound for much of the day, as investor’s tentatively re-entered carry trades following Friday’s events. Overall the USDJPY traded with a range of a low 115.66 and a high of 116.14 before closing the day at 115.84 in the New York session.

• The Sterling (GBP) was able grind up across the board, as UK manufacturing data (PMI) boosted long sterling positions in a stabilizing market. Overall the GBPUSD traded with a range of a low 2.0149 and a high of 2.0208 before closing the day at 2.0174 in the New York session.

• The Australian Dollar (AUD) the Aussie Dollar was supported in the Asian session with a strong reading in building permits, adding to further market confidence in a housing phenomena. The AUDUSD traded with a low 0.8159 and a high of 0.8239 before closing the day at 0.8203 in the New York session. Looking ahead, GDP for the second quarter will be made public on Tuesday morning with forecasts at 0.6%/3.8% for the q/q and y/y respectively. Previous reading was at 1.6%/3.8%. In other news, the RBA begins its two day meeting with an announcement on Thursday. UPDATE: GDP at 0.9%

• Gold (XAU) closed lower in the European session. Gold stood steady at 671.90 an ounce down from highs of 673.00

TECHNICAL COMMENTARY

• Euro 1.3615

Initial support at 1.3593 (Aug 30 low) followed by 1.3562 (38.2% retracement of the 1.3360 to 1.3687 advance). Initial resistance is now located at 1.3719 (Aug 31 high) followed by 1.3842 (Aug 6 reaction high).

• Yen 115.80

Initial support is located at 115.21 (Aug 30 low) followed by 113.85 (Aug 29 low). Initial resistance is now at 116.75 (Aug 27 high) followed by 117.15 (Aug 23 high and key near-term resistance).

• Pound – 2.0170

Initial support at 2.0110 (Aug 31 low) followed by 2.0044 (Aug 30 low). Initial resistance is now at 2.0235 (Aug 31 high) followed by 2.0272 (61.8% retracement of the 2.0656 to 1.9652 decline)

• Australian Dollar – 0.8210

Initial support a 0.8106 (Aug 31 low) followed by 0.8051 (Aug 29 low). Initial resistance is now at 0.8253 (Aug 31 high) followed by 0.8288 (Aug 28 high)

• Gold – 671.80

Initial support at 661.70 (Aug 29 low) followed by 657.70 (Aug 24 low). Initial resistance is now at 674.75 (Aug 31 high) followed by 676.80 (Aug 8 high)