Australian FOREX Daily Outlook 29/11/2006

High yielding currencies rally against the USD. Poor durable goods and consumer confidence weighs on the greenback.

CURRENCY TRADING SUMMARY –29 NOVEMBER 06 (23:30GMT)

• U.S. Dollar Trading (USD) faltered against most of the majors in the overnight foreign exchange trading session as mixed data was released overnight. Durable goods orders fell 8.3% in October from a -4.6% estimate, the largest fall since July 2000. Consumer confidence fell to 102.9 from a 106 estimate in November. Home sales bucked the trend rising to 6.24mln from a 6.15mln estimate. Federal Reserve Chairman Bernanke said that core inflation is likely to moderate gradually but upside risks still remain. In other markets, the Dow Jones rose 14pts and the NASDAQ rose by 6pts as negative consumer sentiment capped any upside moves. Crude oil rose by US63c to US$60.95 a barrel with further speculation of production cuts. Looking ahead, GDP, New Home Sales, and the Beige Book are due out tonight.
  

• The Euro (EUR) traded within a low of 1.3119 and a high of 1.3205, before closing at 1.3189 in the New York session.
  

• The Japanese Yen (JPY) traded within a low of 115.89 and a high of 116.41 versus the dollar, before closing at 116.09 in the New York session. On the data front, industrial production came out at 1.6% compared to a -0.4% estimate. Looking ahead, manufacturing PMI is due out tomorrow.
  

• The Sterling (GBP) traded within a low of 1.9369 and a high of 1.9528, before closing at 1.9509 in the New York session.
  

• The Australian Dollar (AUD) traded within a low of 0.7778 and a high of 0.7842, before closing at 0.7735 in the New York session. On the data front, AUD trade balance came in at -1263mln compared to a -1100mln estimate.
  

• Gold (XAU) fell by US$3.30 to US$637.30 an ounce as profit taking crept in.

TECHNICAL COMMENTARY

• Euro 1.3195

Initial support at 1.3086 (Nov 27 reaction low) followed by 1.298 (Jun 5 high and former key breakout point). Initial resistance is now located at 1.321 (Nov 28 trend high) followed by 1.344 (Mar 16, 2005 high).

• Yen 115.70

Initial support is located at 115.38 (Nov 27 low) followed by 115.18 (Aug 17 low). Initial resistance is now at 116.83 (Nov 23 low &amp neckline of head &amp shoulders pattern) followed by 117.12 (Nov 13 high).

• Pound – 1.9530

Initial support at 1.9306 (Nov 27 reaction low) followed by 1.9182 (Nov 10, 20005 low). Initial resistance is now at 1.9551 (Nov 24 high) followed by 1.9578 (Potential channel top).

• Australian Dollar – 0.7830

Initial support at 0.7731 (Nov 23 low) followed by 0.7705 (Nov 22 low). Initial resistance is now at 0.7845 (Nov 29 trend high) followed by 0.7925 (11/2-month potential channel resistance).

• Gold – 640

Initial support at 630.86 (Trend line support) followed by 614.8 (Nov 17 low). Initial resistance is now at 642.2 (Nov 28 high) followed by 645 (Aug 11 high).