Australian FOREX Daily Outlook 15/11/2006

Mixed trading session. UK, European, German, US data come in weaker. Market awaits FOMC minutes and BoE inflation report.

CURRENCY TRADING SUMMARY –15 NOVEMBER 06 (23:30GMT)

• U.S. Dollar Trading (USD) was generally weaker against the majors in the overnight foreign exchange trading session as PPI and retail sales failed to impress. PPI for the month of October posted a drop to -1.6% from -1.3% previously even though the market was expecting a result of -0.5%. Retail sales improved to -0.2% from a -0.4% estimate although retail sales Ex-Autos posted a drop to -0.4% from a -0.2% estimate. In other markets, the Dow Jones index rose 86pts and the NASDAQ climbed 24pts as stronger sales by major retailers ignited hope of a bumper Christmas selling period. Crude oil dropped by US27c to US$58.31 a barrel as heating oil demand in the US weakened and a report by an energy consulting group suggested that world oil production would not decline for at least another 24 years. Looking ahead, New York Fed survey and FOMC minutes are due out tonight.
  

• The Euro (EUR) traded within a low of 1.2793 and a high of 1.2869, before closing at 1.2823 in the New York session. On the data front, GDP came in at 0.5% from a 0.6% estimate and the German ZEW index came in at -28.5 from a -25 estimate. Looking ahead, Eurozone industrial production is due out today.
  

• The Japanese Yen (JPY) traded within a low of 117.28 and a high of 117.94 versus the dollar, before closing at 117.53 in the New York session. On the data front, the tertiary index came in at -1.3% from a -0.5% estimate. .Looking ahead the BoJ announce their interest rate decision tomorrow.
  

• The Sterling (GBP) traded within a low of 1.8927 and a high of 1.9048, before closing at 1.8971 in the New York session. On the data front, CPI came in at 0.2% compared to a 0.3% estimate for the month of October. Looking ahead, the BoE inflation report for Q4 is due out tonight.
  

• The Australian Dollar (AUD) traded within a low of 0.7620 and a high of 0.7674, before closing at 0.7653 in the New York session. On the data front, consumer confidence came in at -9.7% from 3.9% previously.
  

• Gold (XAU) weakened by US50c to US$625.30 an ounce taking its lead from a weaker greenback.

TECHNICAL COMMENTARY

• Euro 1.2805

Initial support at 1.2789 (Nov 14 low) followed by 1.2721 (Nov 7 low). Initial resistance is now located at 1.2901 (Nov 10 high) followed by 1.2941 (Aug 21 reaction high).

• Yen 117.75

Initial support is located at 117.12 (Nov 13 low) followed by 116.97 (Nov 1 low). Initial resistance is now at 118.61 (Nov 9 corrective high) followed by 119.67 (Oct 24 high).

• Pound – 1.9020

Initial support at 1.8923 (Nov 14 low) followed by 1.8849 (50% retracement of the 1.8516-1.9182 rally). Initial resistance is now at 1.9182 (Nov 10 high) followed by 1.9219 (Apr 20, 2005 reaction high).

• Australian Dollar – 0.7635

Initial support at 0.7614 (Nov 13 low) followed by 0.7592 (50% retracement of the 0.7414 to 0.7768 advance). Initial resistance is now at 0.771 (Nov 11 high) followed by 0.7769 (Nov 1 high).

• Gold – 626

Initial support at 613.4 (Nov 8 low) followed by 598.5 (Oct 31 low). Initial resistance is now at 636.9 (Nov 10 high) followed by 640.6 (Sep 6 high).