Australian FOREX Daily Outlook 23/10/2006

UK GDP better than expected. USD consolidates some of its losses made during the week against the majors.

CURRENCY TRADING SUMMARY –  23 OCTOBER 06 (01:30GMT)
                                                                     

• U.S. Dollar Trading (USD) strengthened against the majors in the overnight foreign exchange trading session as the absence of data and key technical levels holding, meant traders were forced to cover short dollar positions. In other markets, the Dow Jones index fell by 9pts while the NASDAQ rose by 1pt as strong profit from Google helped the market. Crude oil fell by US$1.17 a barrel to US$59.33 as the market awaits to see if the proposed 1.2 million barrel cut per day will be adhered to. Looking ahead, the Richmond Fed survey is due out tomorrow.
  
• The Euro (EUR) traded within a low of 1.2601 and a high of 1.2638, before closing at 1.2620 in the New York session. Market participants were expecting the 1.2650 level to break, but it held up causing the USD to be bought back.   
  
• The Japanese Yen (JPY) traded within a low of 118.17 and a high of 118.77 versus the dollar, before closing at 118.64 in the New York session.
  
• The Sterling (GBP) traded within a low of 1.8760 and a high of 1.8858, before closing at 1.8841 in the New York session. On the data front, UK GDP came in at 0.7% for the third quarter compared to a 0.6% estimate.
  
• The Australian Dollar (AUD) traded within a low of 0.7575 and a high of 0.7604, before closing at 0.7586 in the New York session.      
  
• Gold (XAU) was weaker by US$6.10 to US$596.40 an ounce after reaching a high of US$606 as profit takers entered the market and the price was weighed down by the drop in oil.   

• Euro 1.2615

Initial support at 1.2527 (Oct 19 low) followed by 1.2483 (Oct 16 low). Initial resistance is now located at 1.2644 (Oct 19 high) followed by 1.27 (61.8% retracement of the 1.2834 to 1.2483 decline).

• Yen 118.70

Initial support is located at 117.53 (61.8% retracement of the 116.06 to 119.90 advance) followed by 117.32 (Sep 28 low). Initial resistance is now at 119.2 (Oct 18 high) followed by 119.9 (Oct 13 trend high).

• Pound – 1.8820

Initial support at 1.8755 (Oct 20 low) followed by 1.8663 (Oct 18 low). Initial resistance is now at 1.8863 (Oct 20 high) followed by 1.8904 (Oct 3 high).

• Australian Dollar – 0.7590

Initial support at 0.7524 (Oct 17 low) followed by 0.7489 (Oct 13 low). Initial resistance is now at 0.7604 (61.8% retracement of the 0.7722 to 0.7414 decline) followed by 0.7649 (76.4% retracement of the 0.7722 to 0.7414 decline).

• Gold – 592

Initial support at 586.1 (Oct 17 low) followed by 577.4 (Oct 13 low). Initial resistance is now at 602.6 (Oct 20 high) followed by 607.01 (Sep 28 high).