Wednesday October 20, 2004 - 21:12:51 GMT
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Dollar Rocked As EURO Breaks Out
The Dollar was rocked overnight and across the board today in the N.Y session. In Euro the 1.2550 region was supposed to be protected by a large option related player until a large European hedge fund was reported to have been the catalyst in the Euro/Dollar explosion. Stops were triggered through this level and through 1.2600 as well. Dollar/Jpy on the other hand looked weak through the 108.20/25 level break but rumors of Asian central bank buying and BOJ checking rates caused the Dollar to rally toward 108.40 for the mean time. The Dollar also wilted against the Canada after the well talked about 1.2500 level was blasted and Dollar/Canada sank to session lows of 1.2415 before rebounding to 1.2460 after N.Y lunch. Euro after putting in a 1.2630 high, faded to the 1.2580 level where more buying was seen in an attempt to get involved in the strong Euro momentum. Tomorrow brings Leading Economic Indicators at 8:30am, Home Sales at 10am and Philly Fed at 12pm all Eastern time.
TECHNICALLY SPEAKING Dollar/Jpy continues to respect the 108.00/10 level. There is further technical support seen in the short term below the 108.00 level at 107.75/80. There is resistance at 108.70/80. Dollar/Jpy remains below all its 30 120 and 200 hr moving averages. The Relative Strength index is sagging at 37.85 on the 60 minute chart.
GAIN AN EDGE We look to sell the rally into 108.65/80 level with a stop above 109.00 and a take profit of 108.10/15 and the revolve the trade.
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