Australian FOREX Daily Outlook 11/12/2006

Dollar gains on majors after better than expected payroll data. US Treasury Secretary comments on the Yuan shake markets.

CURRENCY TRADING SUMMARY –11 DECEMBER 06 (23:30GMT)

• U.S. Dollar Trading (USD) strengthened against the majors in the overnight foreign exchange trading session as US payroll data beat expectations. US non-farm payrolls rose by 132k in November, beating estimates of 110k. US consumer sentiment however eased from 92.1 to 90.3 for December, where forecasters were expecting a level of 92. In an interview with CNBC, Treasury Secretary Paulson commented that China needs more foreign exchange flexibility. In other markets, the Dow Jones index posted a gain of 29pts and the NASDAQ rallied 9pts higher as the markets breathed a sigh of relief after the employment data. Crude oil fell by US46c to US$62.03 a barrel as traders felt confident that supplies would be adequate even with a possible production cut.

• The Euro (EUR) traded within a low of 1.3190 and a high of 1.3365, before closing at 1.3203 in the New York session.

• The Japanese Yen (JPY) traded within a low of 114.90 and a high of 116.51 versus the dollar, before closing at 116.38 in the New York session. Looking ahead, consumer confidence is due out today.

• The Sterling (GBP) traded within a low of 1.9514 and a high of 1.9713, before closing at 1.9530 in the New York session.

• The Australian Dollar (AUD) traded within a low of 0.7852 and a high of 0.7930, before closing at 0.7853 in the New York session.
• Gold (XAU) fell by US$6.00 to US$631.00 an ounce as a response to a firmer greenback.

TECHNICAL COMMENTARY

• Euro 1.3165

Initial support at 1.3191 (Dec 8 low) followed by 1.3132 (Nov 29 reaction low). Initial resistance is now located at 1.3368 (Dec 4 high) followed by 1.344 (Mar 16, 2005 high).

• Yen 116.40

Initial support is located at 114.43 (Dec 5 low &amp 50% ret. 108.98 to 119.90) followed by 113.97 (Aug 4 low). Initial resistance is now at 116.57 (Nov 30 high) followed by 117.01 (0.618 retracement of 118.61-114.43).

• Pound – 1.9505

Initial support at 1.9513 (Dec 8 low) followed by 1.9463 (38.2% retracement of the 1.8838 to 1.9849 advance). Initial resistance is now at 1.9729 (Dec 8 high) followed by 1.9849 (Dec 1 high).

• Australian Dollar – 0.7840

Initial support at 0.7836 (Dec 7 low) followed by 0.7817 (Nov 29 low). Initial resistance is now at 0.7933 (Dec 8 trend high) followed by 0.799 (Mar 8, 2005 high).

• Gold – 624

Initial support at 625.4 (Dec 7 low) followed by 614.8 (Nov 17 reaction low). Initial resistance is now at 641.1 (Dec 6 high) followed by 650.2 (Dec 1 high).