Australian FOREX Daily Outlook 25/07/2006

CURRENCY TRADING SUMMARY –25JULY06 (05:00GMT)

• U.S. Dollar Trading (USD) was range bound in the overnight forex session as the foreign exchange market had little to act upon with few data releases and the conflict in the Middle-East nearing its third week of fighting. In other markets, the Dow Jones rose by 182pts while the NASDAQ gained 41pts after encouraging earnings results and large corporate deals helped the US share markets to rally. Crude oil rose by US62c to US$75.05 a barrel after the US announced that it was not seeking a ceasefire in the Middle-East if the terms of the ceasefire agreement were not be adhered to and fighting were to flare up again. Looking ahead, existing home sales and consumer confidence is due out today.
  

• The Euro (EUR) traded within a low of 1.2612 and a high of 1.2707, before closing at 1.2636 in the New York session. On the data front, Eurozone industrial orders impressed the markets showing a rise of 2.3% for May, beating market forecasts of -0.5%.
  

• The Japanese Yen (JPY) traded within a low of 116.12 and a high of 116.83 versus the dollar, before closing at 116.68 in the New York session.

• The Sterling (GBP) traded within a low of 1.8484 and a high of 1.8595, before closing at 1.8511 in the New York session.
  

• The Australian Dollar (AUD) traded within a low of 0.7502 and a high of 0.7548, before closing at 0.7542 in the New York session.
  
• Gold (XAU) fell by US$7.00 to US$613.20 an ounce after initial talks of a possible ceasefire in the Middle-East.

TECHNICAL COMMENTARY

• Euro 1.2620

Initial support at 1.2586 (Jul 20 low) followed by 1.2456 (Jul 19 corrective low). Initial resistance is now located at 1.2711 (Jul 4 high and 61.8% retracement of the 1.2865 to 1.2456 decline) followed by 1.2768 (76.4% retracement of the 1.2865 to 1.2456 decline).

• Yen 116.90

Initial support is located at 115.82 (Jul 21 low) followed by 115.67 (50% retracement 113.45 to 117.89 &amp Jul 17 low). Initial resistance is now at 117.14 (Jul 21 high) followed by 117.89 (Jul 20 corrective high).

• Pound – 1.8485

Initial support at 1.8469 (Jul 21 low) followed by 1.8413 (Jul 20 low). Initial resistance is now at 1.86 (July 21 high) followed by 1.8669 (61.8% retracement of the 1.9027 to 1.8090 decline).

• Australian Dollar – 0.7535

Initial support at 0.7489 (Jul 20 low) followed by 0.7405 (Jul 19 low). Initial resistance is now at 0.7568 (July 13 reaction high) followed by 0.7594 (61.8% retracement of the 0.7795 to 0.7269 decline).

• Gold – 618

Initial support at 597.35 (Jun 30 low) followed by 594.25 (61.8% retracement of the 543.50 to 676.35 advance). Initial resistance is now at 637.18 (Jul 21 high) followed by 645.5 (Jul 20 high).