Monday October 11, 2004 - 18:34:47 GMT
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Forex: Quiet After The Storm
Markets quiet for Holiday. The market has been very quiet today following Friday fireworks, as Columbus Day has come for the US. With Asia out as well last night we have seen very little market moves today. The dollar has risen slightly against its G7 counterparts but no follow thru much higher is expected with Europe gone and most of the US out. We have seen a high in the greenback today at 1.2528 and a low in euro at 1.2370. USDJPY and EURJPY have remained soft as rumors of the Chinese revaluation have remained in sight. The new highs in crude oil prices have not given much of a push higher for the yen. Normally because of its correlation with crude oil prices we would see a move higher but, there has been no such luck since last Thursday night when the sell off began. Gas prices have hit a four month high at $1.99, and the DOW was up slightly today as most markets were open despite the holiday.
Technically Speaking: We see a nice head and shoulders pattern forming in the AUDJPY currency, which because of the yen crosses sell off and the highs in oil prices, we could see a major pullback coming. This could also lead to further weakness in the AUDUSD as well. 81.00 figure in AUDJPY has capped the market and we could see a pullback to 76.80 as first line support. If this level were to be taken out we can drift all the way back to 74.00 support.
Gain an Edge: We look to sell AUDJPY on a bounce towards 81.00, with a stop in place at 81.50; our take profit will be 77.00 for half of our position and 74.00 for the balance of the position.
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