Wednesday February 27, 2008 - 04:12:18 GMT
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FX Thoughts for the Day - www.fxthoughts.com
Fx Thoughts for the Day
OVERNIGHT NEWS AND DATA
US Dollar has hit record lows against the EUR in the Asian session today (1.5050) and on the Dollar Index. The Dollar's fall was initially triggered by the higher than expected German IFO numbers yesterday and then a Fed official's comment that growth was a bigger concern than inflation added to the Dollar's woes. For a chart on the IFO numbers, please click on
Nymex Crude futures rose to a high of 101.35. Gold has risen to 959 in Asian trading today, after finding Support at 928.90 yesterday. It is currently trading near 956.
Funnily, although the Dollar has lost further ground, US stocks have not done badly. The DJIA has closed 114.70 higher, at 12684.92. In fact, it is holding above a trendline joining the Mar-03 and Jul-06 Lows on the Weekly Closing chart. Please click on http://www.kshitij.com/graphgallery/djiama.shtml
All eyes will be on the US data tonight, especially the Q4 Preliminary GDP number. A weaker than expected figure could be really bad for the Dollar
13:30 GMT...Jan US Durable Goods, Exp -1.4%, Prev 2.3%
13:30 GMT...US GDP Q4 07 (Prelim), Exp 0.7%, Prev 0.6%
EUR-USD @ 1.4996/5000...Could test 1.5090-5130
R: 1.5050 / 1.5090 / 1.5130
S: 1.4970 / 1.4950-35 / 1.4886
The Euro has seen a high near 1.5050 in the Asian session so far today. It is expected to remain bid through the day. Those, like us, who might have been looking for the (earlier) range of 1.4500-4950 to hold, might need to review their outook. Further, the market would not be willing to sell the Euro ahead of the crucial US data tonight.
That said, we see important Resistance in the 1.5090-5130 region on a trendline on the Weekly Candles, joining the Highs at 1.3665 (Dec-04) and 1.4967 (Nov-07). This trendline Resistance could well be tested today, but might not break.
Buying on a small dip towards 1.4975 could be considered.
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