Australian FOREX Daily Outlook 22/11/2006

Technical trading seen due to absence of data. USD slides against the majors. Gold climbs higher.

CURRENCY TRADING SUMMARY –22 NOVEMBER 06 (23:30GMT)

• U.S. Dollar Trading (USD) weakened against the majors in the overnight foreign exchange trading session as thin trading due to lack of data dominated the markets. The White House cut its forecast for US economic growth in 2007 from 3.3% to 2.9%. US Federal Reserve Governor, Kevin Warsh, noted that inflation was uncomfortably elevated. In other markets, the Dow Jones index rose 5pts and the NASDAQ gained 2pts in what was thin trading ahead of the Thanksgiving holiday. Crude oil rose by US$1.22 to US$60.14 a barrel as severe weather in Alaska had impeded loading of oil tankers. Looking ahead, initial jobless claims and consumer sentiment are due out today.
  

• The Euro (EUR) traded within a low of 1.2801 and a high of 1.2853, before closing at 1.2843 in the New York session. Looking ahead, industrial orders are due out today.
  

• The Japanese Yen (JPY) traded within a low of 117.78 and a high of 118.24 versus the dollar, before closing at 117.86 in the New York session. On the data front, the minutes of the BoJ meeting stated that the Japanese economy is expected to grow at planned pace and that any move in interest rates will be dependent on data. Trade balance came in at 614.7bln compared to a 760bln estimate for the month of October.
  

• The Sterling (GBP) traded within a low of 1.8965 and a high of 1.9004, before closing at 1.8996 in the New York session. On the data front, CBI orders came in at -6 compared to a -15 estimate for the month of November. Looking ahead, the BoE MPC minutes are due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7684 and a high of 0.7713, before closing at 0.7711 in the New York session.
  

• Gold (XAU) rose by US$6.60c to US$628.70 an ounce as stronger platinum and oil prices helped the yellow metal.

TECHNICAL COMMENTARY

• Euro 1.2845

Initial support at 1.2761 (Nov 17 low) followed by 1.2746 (Nov 8 low). Initial resistance is now located at 1.2901 (Nov 10 high) followed by 1.2941 (Aug 21 reaction high).

• Yen 117.85

Initial support is located at 117.12 (Nov 13 low) followed by 116.57 (Nov 1 low). Initial resistance is now at 118.61 (Nov 9 corrective high) followed by 119.67 (Oct 24 high).

• Pound – 1.8990

Initial support at 1.8932 (Nov 20 low) followed by 1.8835 (Nov 17 high1.8516-1.9182 rally). Initial resistance is now at 1.8987 (Nov 20 high) followed by 1.9052 (Nov 14 high).

• Australian Dollar – 0.7710

Initial support at 0.7642 (Nov 16 low) followed by 0.7614 (Nov 13 corrective low). Initial resistance is now at 0.7715 (Nov 21 high) followed by 0.7769 (Nov 1 high).

• Gold – 628

Initial support at 614.8 (Nov 17 low) followed by 613.4 (Nov 8 low). Initial resistance is now at 629.5 (Nov 14 high) followed by 636.9 (Nov 10 high).