Australian FOREX Daily Outlook 22/09/2006

CURRENCY TRADING SUMMARY –22 SEPTEMBER06 (01:30GMT)

• U.S. Dollar Trading (USD) was weaker against the majors in the overnight foreign exchange trading session as the US Philly Fed survey came in much lower than expected prompting a rally across the board against the US dollar. Markets were expecting a level of 14.5 for the survey however, it posted a level of -0.4, disappointing traders. In other markets, the Dow Jones index fell by 80pts while the NASDAQ fell by 15pts on the back of the poor Philly Fed survey. Crude oil rebounded as speculators entered the market keeping oil above US$60 a barrel. Crude oil rose by US$1.14 to close at US$61.60 a barrel. Looking ahead, no data releases expected out of the US.
  

• The Euro (EUR) traded within a low of 1.2695 and a high of 1.2797, before closing at 1.2780 in the New York session. On the data front, Eurozone current account came in worse than expected at -4.8billion for the month of July compared to an estimated -1.2billion.
  

• The Japanese Yen (JPY) traded within a low of 116.26 and a high of 117.35 versus the dollar, before closing at 117.37 in the New York session.
  

• The Sterling (GBP) traded within a low of 1.8885 and a high of 1.9030, before closing at 1.8870 in the New York session.
  

• The Australian Dollar (AUD) traded within a low of 0.7540 and a high of 0.7578, before closing at 0.7570 in the New York session. On the data front, a poor New Zealand Current account balance of just over -$3billion compared to an estimated -$2.772billion caused a rally in the AUD/NZD which flowed onto the AUD/USD.
  

• Gold (XAU) rose by US$2.10 to US$578.30 an ounce on the back of a weaker greenback and a rise in oil prices as speculators entered wishing to buy on dips.

TECHNICAL COMMENTARY

• Euro 1.2780

Initial support at 1.263 (Sep 15 low) followed by 1.257 (76.4% retracement of the 1.2456 to 1.2941 advance). Initial resistance is now located at 1.2803 (61.8% of 1.2941-1.2630 decline) followed by 1.2836 (Sep 6 high).

• Yen 117.20

Initial support is located at 116.1 (Sep 8 reaction low) followed by 115.91 (Sep 7 reaction low). Initial resistance is now at 116.97 (Sep 20 low) followed by 117.77 (Sep 20 high).

• Pound – 1.8915

Initial support at 1.8931 (Sep 20 high) followed by 1.8863 (Sep 21 low). Initial resistance is now at 1.9094 (Aug 31 reaction high) followed by 1.9146 (Aug 8 trend high).

• Australian Dollar – 0.7565

Initial support at 0.7482 (Sep 13 low) followed by 0.7442 (61.8% retracement of the 0.7269 to 0.7722 rally). Initial resistance is now at 0.7582 (Sep 21 high) followed by 0.7601 (Sep 8 high and 50% ret 0.7722 to 0.7482 decline).

• Gold – 575

Initial support at 571 (Sep 15 low) followed by 561.0 (Jun 20 low). Initial resistance is now at 589.25 (Sep 18 high) followed by 595.35 (Sep 14 high).