Australian FOREX Daily Outlook 14/09/2007

Sterling tumbles on liquidity concerns. US Retail Sales highlight.

CURRENCY TRADING SUMMARY –14 SEPTEMBER 2007 (00:30GMT)

• U.S. Dollar Trading (USD) traded near record lows against a basket of majors on further expectations that the Federal Reserve will look to cut interest rates as early as next week. In U.S. share markets the NASDAQ was up 8.99 points (+0.35%) whilst the Dow Jones was up 133.23 points (+1.00%). Crude Oil set another record high of US$80.20 before closing US$80.09. Looking ahead key data out of the US will be released in the form of Retail Sales and Current Account.

• The Euro (EUR) traded near record highs against the USD once more. Overall the Euro traded with a range of a low 1.3863 and a high of 1.3930 before closing the day at 1.3881 in the New York session. Looking ahead key inflationary data is expected out of the Eurozone in the form CPI.

• The Japanese Yen (JPY) the most against the dollar and Euro in more than two weeks as investors took advantage of political uncertainty in Japan and increasing risk appetite to buy assets funded by loans in the country. Overall the USDJPY traded with a range of a low 114.10 and a high of 115.50 before closing the day at 115.17 in the New York session.

• The Sterling (GBP) reached a month low against a trade weighted basket of currencies but held flat at 2.0285 against the USD. Overall the GBPUSD traded with a range of a low 2.0237 and a high of 2.0346 before closing 2.0286 in the New York session. Early Asian session Friday saw reports circulating regarding one of the UK’s largest mortgage lender’s, Northern Rock sourcing emergency funds from the BoE, causing an unwinding GBPJPY positions.

• The Australian Dollar (AUD) remained relatively steady throughout the session. Overall the AUDUSD traded with low of 0.8368 and a high of 0.8437 before closing the day at 0.8401 in the New York session.

• Gold (XAU) fell on speculation that the dollar may correct. XAU traded with a low of 704.05 and a high of 712.10.

TECHNICAL COMMENTARY

• Euro 1.3870

Initial support at 1.3825 (Sep 12 low) followed by 1.3765 (Sep 10 low). Initial resistance is now located at 1.3927 (Sep 13 trend high) followed by 1.4000 (Psychological resistance).

• Yen 115.00

Initial support is located at 112.61 (Sep 10 low) followed by 111.61 (Aug 17 low). Initial resistance is now at 115.66 (Sep 7 high) followed by 116.61 (Aug 31 high).

• Pound – 2.0185

Initial support at 2.0142 (Sep 11 low) followed by 2.0039 (Sep 5 low). Initial resistance is now at 2.0400 (Psychological number) followed by 2.0419 (76.4% retracement of 2.0656 – 1.9652)

• Australian Dollar – 0.8390

Initial support a 0.8238 (Sep 11 low) followed by 0.8156 (Sep 3 low). Initial resistance is now at 0.8441 (Sep 13 high) followed by 0.8460 (0.8051 plus 0.618 of 0.7674 – 0.8336).

• Gold – 706.30

Initial support at 702.75 (Sep 11 low) followed by 699.50 (Sep 10 low). Initial resistance is now at 714.25 (Sep 11 high) followed by 720.10 (May 15 high)