Thursday May 13, 2004 - 18:17:36 GMT
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Dollar Fights Back
The greenback made an impressive comeback overnight as we saw the dollar trade back above the double-top highs of 1.3080 to a new high of 1.3095. The euro which looked like it was poised yesterday to make a run at 1.2030 has fallen from grace in the past 24 hours to a low in NY of 1.1776, just short of 1.1760 support. The looming stops at 1.1750 which can open the door way to 1.1400 are just waiting to be done. Traders believe that a run at the stops will be taken in Asia and we may see it taken out in Europe. If that does not happen than we await tomorrows NY data releases to give us the boost to further gains in the greenback. This morning started with euro coming off its perch when it was said that the Saudi government still favors the dollar over the euro for hedging against its reserves. This sent the euro from 1.1880 to 1.1825, we then bounced on the NY data this morning as retail sales was better than expected and first quarter GDP was stronger despite very weak domestic demand. Jobless claims came in at 331K. The euro bounce was limited to 1.1855 and could not mount any steam to test resistance now at 1.1880. The cross was the main driver again today as we saw the euro against the yen trade to a high overnight to 135.85 and a NY high of 135.70 before any retracement. The dollar against the yen was driven to a NY high of 114.62 on the back of the strong cross gains and has yet to slip much lower in NY since. This is again led by the weakening of the Nikkei again last night. There is talk of offers in front of the psychological 115.00 level, so we should see a fall back to 113.75 possibly.
Technically Speaking. The euro looks weak and the charts are turning lower on the dailies. The hourly shows the slow stochastic at 46.55, and the RSI is sliding lower to 39.40.
Gain an Edge. We look to sell euro on a bounce to the 1.1755 level, with a stop in place above 1.1910, our objective being 1.1400 in the coming weeks if not days.
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