Australian FOREX Daily Outlook 15/12/2006

Dollar strengthens as jobless claims impresses. Gold slides and oil rises. Market awaits Tankan survey from Japan.

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

• U.S. Dollar Trading (USD) gained against the majors in the overnight foreign exchange trading session as US jobless claims came in less than expected. Initial jobless claims for last week fell by 20k to 304k when analysts were expecting a drop of only 4k to 320k. In other markets, the Dow Jones index finished up 99pts and the NASDAQ climbed 21pts as the Dow Jones closed at record highs thanks to a range of stronger earnings reports during the session. Crude oil rose by US$1.06 to US$62.50 a barrel as OPEC announced they would cut production by 500k barrels per day from the start of February 2007. Looking ahead, US CPI, NY Fed survey, and industrial production are due out tonight.

• The Euro (EUR) traded within a low of 1.3143 and a high of 1.3254, before closing at 1.3153 in the New York session. Looking ahead, industrial production and HICP data are due out tonight.

• The Japanese Yen (JPY) traded within a low of 117.26 and a high of 117.89 versus the dollar, before closing at 117.84 in the New York session. Looking ahead, the Tankan survey is due out today.

• The Sterling (GBP) traded within a low of 1.9580 and a high of 1.9713, before closing at 1.9609 in the New York session. On the data front, retail sales came in at 0.3% stronger than the expected level of 0.1%. Also, retail sales for October was revised up from 0.9% to 1.0%.

• The Australian Dollar (AUD) traded within a low of 0.7816 and a high of 0.7874, before closing at 0.7827 in the New York session.

• Gold (XAU) fell by US$1.20 to US$630.80 an ounce as the greenback strengthened.

TECHNICAL COMMENTARY

• Euro 1.3150

Initial support at 1.314 (Dec 14 low) followed by 1.313 (Dec 11 corrective low). Initial resistance is now located at 1.3293 (Dec 12 high) followed by 1.3368 (Dec 4 trend high).

• Yen 117.80

Initial support is located at 116.65 (Dec 13 low) followed by 116.17 (Dec 11 low). Initial resistance is now at 117.89 (Dec 14 high) followed by 118.48 (Nov 17 corrective high).

• Pound – 1.9610

Initial support at 1.9575 (Dec 12 low) followed by 1.9463 (38.2% retracement of the 1.8838 to 1.9849 advance). Initial resistance is now at 1.9759 (76.4% retracement of the 1.9849 to 1.9466 decline) followed by 1.9849 (Dec 1 high).

• Australian Dollar – 0.7825

Initial support at 0.7811 (38.2% retracement of the 0.7614 to 0.7933 advance) followed by 0.7769 (Former resistance from Nov 1). Initial resistance is now at 0.7933 (Dec 8 trend high) followed by 0.799 (Mar 8, 2005 high).

• Gold – 626

Initial support at 623.4 (Dec 11 low) followed by 614.8 (Nov 17 reaction low). Initial resistance is now at 638.1 (Dec 8 high) followed by 650.2 (Dec 1 high).