Australian FOREX Daily Outlook 27/09/2006

CURRENCY TRADING SUMMARY –27 SEPTEMBER06 (01:30GMT)

• U.S. Dollar Trading (USD) strengthened against the majors in the overnight forex session as both consumer confidence and the Richmond Fed index impressed the markets. Consumer confidence rose from 100.2 to 104.5 from an expected 102.3 for the month of September. The Richmond Fed index rose from 3 to 9 from an expected 5 for the current month. In other markets, the Dow Jones index buoyed by a stronger consumer confidence number, rallied to its second highest close on record, finishing up 92pts while the NASDAQ climbed 11pts. Crude oil fell by US44c to close at US$61.01 a barrel despite concerns from OPEC that current prices are too low. Looking ahead, durable goods orders and new home sales are due out tonight.
  

• The Euro (EUR) traded within a low of 1.2664 and a high of 1.2760, before closing at 1.2690 in the New York session. On the data front, the IFO business climate beat the expected level of 104.4 by coming in at 104.9. However, the expectations measure fell to 98.9 from a previous reading of 101.4. Looking ahead, M3 money supply is due out today.
  

• The Japanese Yen (JPY) traded within a low of 116.28 and a high of 117.22 versus the dollar, before closing at 117.11 in the New York session on the back of USD strength.
  

• The Sterling (GBP) traded within a low of 1.8933 and a high of 1.9026, before closing at 1.8945 in the New York session. Looking ahead, GDP and current account are due out today.
  

• The Australian Dollar (AUD) traded within a low of 0.7501 and a high of 0.7545, before closing at 0.7515 in the New York session. Comments from NZ Finance Minister Dr Cullen caused a sell-off in the Kiwi which flowed onto the AUD, as he mentioned that there is a possibility of a sharp fall in the NZD, and that the RBNZ will not raise rates again or cut them until 2008.
  
• Gold (XAU) rose by US$1.20 to US$586.90 an ounce as tight supplies supported metal prices.

TECHNICAL COMMENTARY

• Euro 1.2690

Initial support at 1.263 (Sep 15 reaction low) followed by 1.257 (76.4% retracement of the 1.2456 to 1.2941 advance). Initial resistance is now located at 1.2763 (Sep 26 high) followed by 1.2834 (Sep 22 reaction high).

• Yen 117

Initial support is located at 116.06 (Sep 22 low) followed by 115.56 (Sep 5 reaction low). Initial resistance is now at 117.49 (Sep 21 low) followed by 117.77 (Sep 20 high).

• Pound – 1.8950

Initial support at 1.892 (Former resistance from Sep 14) 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 – 0.7520

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 – 592

Initial support at 582.49 (Sep 25 low) followed by 571.0 (Sep 15 low). Initial resistance is now at 594.1 (Sep 26 high) followed by 595.35 (Sep 14 high).