Thursday October 7, 2004 - 19:45:48 GMT
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Dollar off the Deep End
Market Yawns in Anticipation of NFP. The market has remained steady ahead of Fridays all important NFP figures tomorrow. The dollar was given a small boost of confidence today as initial jobless claims were better than expected at +335K, the market was expecting +355K; this helped the dollar bounce off its NY session lows of 1.2610. The euro is unable to overtake 1.2325, and in the mean time is holding just above support levels of 1.2275. A break back below this level could see us make new lows towards 1.2200. The market seems to be waiting for tomorrows figure before deciding which way to turn. The market is looking for a 150ish number tomorrow and anything lower could be devastating to the greenback. The dollar on the back of the good initial claims number and stronger retail sales was still unable to take out technical resistance at 1.2680. Retail figures were up 2.3% compared to last month and this still was unable to move a very unenthusiastic market to say the least today. The market also saw oil climb to another record high of $53.00 a barrel and this helped keep USDJPY and EURJPY buoyant for the time being, although the Chinese talking about a revaluation of there currency has bogged the 2 currencies from making some new fresh gains. Exporter interest to sell above 111.50 and 137.00 respectively has also bogged down the currencies, but importer interest to buy below 111.00 has helped keep us trapped in a range. Interesting to note that most times Presidential debates take place on a Thursday, yet with NFP out tomorrow and the debate to take place 12 hours later could see mud on your face results since the debate will be on the economy and tomorrow being highlighted with the NFP. Either President Bush will look good following a good number or Kerry will be able to throw pie in his face with a bad number. The market seems poised to wait.
Technically Speaking: The dollar just barely broke very good technical resistance at 1.2680 yesterday, and hold above very good support at 1.2600. There seems to be a growing conspiracy theory that tomorrows NFP will be in line with expectations and dollar positive, this with the theory behind it that President Bush will look good for the debate later on at night. There is more technical resistance at 1.2695-1.2705 area but a clean break of this will lead us to 1.2800 levels.
Gain an Edge: We look to buy the greenback on dips to 1.2600-1.2580, with a stop at 1.2550. Our objective is for a move to 1.2800.
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