Australian FOREX Daily Outlook 24/07/2007

AUD and NZD break key psychological levels as the GBP trades above 2.0600. USDJPY trades at a six week low adding further insult to the greenback.

CURRENCY TRADING SUMMARY –24 JULY 2007 (00:30GMT)

• U.S. Dollar Trading (USD) eased across the board as absence of data saw traders remain cautious. As a result the USD traded near 12 year lows against a basket of currencies, where uncertainty in the sub prime mortgage market has seen continual betting against the greenback. In U.S. share markets the NASDAQ was up 2.98 points (0.11%) whilst the Dow Jones was also up by 92.34 points (0.67%). Crude Oil eased on Monday falling by 1.31% to US$74.80 a barrel. Looking ahead, second tier data is expected out of the U.S. today with the release of the Redbook and the Richmond Fed index.

• The Euro (EUR) was relatively unchanged against the dollar, yet remained near record highs for much of the session. Overall the EURUSD traded with a range of a low 1.3795 and a high of 1.3846 before closing the day at 1.3803 in the New York session. Looking ahead key data out of the EZ is expected today with the release of Manufacturing PMI, with forecast the figure will be released at 55.5 slightly down on the previous 55.6. Other key data out of the Euro zone Tuesday will include Current Account (Forecast: -5.3 bln, Previous: -6.5 bln), and Industrial Orders (Forecast: 1.1%, Previous: -0.4%) both for the month of May.

• The Japanese Yen (JPY) was steady throughout Monday as the dust began settling from China’s rate hike on Friday. The USDJPY pair did trade at a six week low of 120.80 during the Asian session. Overall the USDJPY traded with a range of a low 120.80 and a high of 122.22 before closing the day at 121.31 in the New York session.

• The Australian Dollar (AUD) traded in a tight range on Monday as investors continued to foresee further fallouts in the US sub prime mortgage market pushing the Aussie dollar up. Overall the AUDUSD traded with a range of a low 0.8790 and a high of 0.8843 before closing the day at 0.8797 in the New York session. In other news the Kiwi dollar (NZD) continued on its upward trend surging through key 0.8000 levels as traders pre-empted rate hikes from the RBNZ later on this week, despite the call rate being the highest of the industrialized nations at 8.00%.

• The Turkish Lira (TRY) saw the Istanbul Stock Exchange jump 5% on Monday after the Islamic party won the general election, strengthening its power in the parliament. The Turkish Lira strengthened against the dollar and the Euro in more then 2%. Against the USD the Lira hit 6 years high.

• Gold (XAU) eased slightly falling by US$ 3.20 an ounce to US$681.50

CURRENCY PAIR IN FOCUS

• The Sterling (GBP) rose to a fresh 26 year high against the USD breaking through key 2.0600 levels before paring its gains. Overall the GBPUSD traded with a range of a low 2.0522 and a high of 2.0602 before closing the day at 2.0577 in the New York session.

TECHNICAL COMMENTARY

• Euro 1.3805

Initial support at 1.3730 (July 11 low) followed by 1.3592 (Jul 10 low). Initial resistance is now located at 1.38 (Jul 20 trend high) followed by 1.3852 (Open + (Last weeks range * 1.618).

• Yen 120.95

Initial support is located at 120.76 (Jun 8 reaction low) followed by 120.15 (May 16 low). Initial resistance is now at 121.70 (Jul 23 high) followed by 122.62 (Jul 13 high)

• Pound – 2.0595

Initial support at 2.0460 (Jul 18 low) followed by 2.0243 (Jul 11 low). Initial resistance is now at 2.0605 (July 23 trend high) followed by 2.0683 (Intraday Channel Resistance)

• Australian Dollar – 0.8830

Initial support a 0.8780 (Jul 23 low) followed by 0.8717 (Jul 17 low). Initial resistance is now at 0.8847 (Jul 23 trend high) followed by 0.8919 (1.00 progression of 0.8163-0.8749 from 0.8333)

• Gold – 682.30

Initial support at 663.00 (Jul 17 low) followed by 671.60 (Jul 19 low). Initial resistance is now at 686.30 (Jul 20 high) followed by 690.90 (May 7 low)