Australian FOREX Daily Outlook 24/11/2006

USD continues its weakness ahead of US and Japanese holidays. Gold edges higher. IFO index much better than expected. Euro testing yearly highs.

CURRENCY TRADING SUMMARY –24 NOVEMBER 06 (23:30GMT)

• U.S. Dollar Trading (USD) continued its slide against the majors in the overnight foreign exchange trading session as the Japanese and US holidays meant thin volume trading. The US enjoyed Thanksgiving Day holidays, thus, the NYSE and NASDAQ were closed for business. Crude oil slipped US14c to US$59.41 a barrel as higher inventories continued to place downward pressure on crude oil prices. Looking ahead, the US markets resume business as normal.
  

• The Euro (EUR) traded within a low of 1.2931 and a high of 1.2973, before closing at 1.2950 in the New York session. On the data front, IFO business climate index came in at 15 year highs at 106.8 compared to a 105.2 estimate.
  

• The Japanese Yen (JPY) traded within a low of 116.07 and a high of 116.81 versus the dollar, before closing at 116.19 in the New York session. Looking ahead, Japan comes back from their Labour Thanksgiving Holidays.
  

• The Sterling (GBP) traded within a low of 1.9133 and a high of 1.9168, before closing at 1.9156 in the New York session. Looking ahead, UK GDP is due out tonight.
  

• The Australian Dollar (AUD) traded within a low of 0.7733 and a high of 0.7760, before closing at 0.7741 in the New York session.
  

• Gold (XAU) rose by US$1.60 to US$630.60 an ounce in thin trading and amid USD weakness.

TECHNICAL COMMENTARY

• Euro 1.2950

Initial support at 1.2839 (Nov 21 low) followed by 1.2814 (Intra-range trend line support). Initial resistance is now located at 1.298 (Jun 5 high and the top of the broad range) followed by 1.3 (Psychological resistance).

• Yen 116.25

Initial support is located at 116.03 (Nov 23 low) followed by 115.56 (Sep 5 low). Initial resistance is now at 117.12 (Nov 13 low) followed by 117.92 (Nov 22 high).

• Pound – 1.9155

Initial support at 1.8984 (Nov 22 low) followed by 1.8835 (Nov 17 low and key near-term support). Initial resistance is now at 1.9182 (Nov 10 trend high) followed by 1.92 (Psychological resistance).

• Australian Dollar – 0.7735

Initial support at 0.7705 (Nov 22 low) followed by 0.7675 (Nov 20 low). Initial resistance is now at 0.7769 (Nov 1 reaction high) followed by 0.7795 (May 11 reaction high).

• Gold – 631

Initial support at 621 (Nov 20 low) followed by 614.8 (Nov 17 low). Initial resistance is now at 634.75 (Nov 22 high) followed by 636.9 (Nov 10 high).