Monday November 1, 2004 - 12:40:48 GMT
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CMC - www.cmcforex.com
Forex: Split vote in US election will leave the dollar badly exposed to downside.
Nov 1st 0600EST- The greenback has regained a little ground in recent hours, although traders remain highly cautious of the implications if we see a split vote again tomorrow. Any uncertainty over who will be the next US President will without doubt be seen as a negative by the market and this will leave the
dollar badly exposed on the downside. Furthermore, the very prospect of
this uncertainty is likely to keep trading thin and result in a general
lack of commitment in either direction over the next 48 hours. Although
cable has now softened slightly, better than expected UK PMI data released
earlier today provided some support so we’re now sitting close to 1.8330.
Consensus remains that the MPC cannot afford to hike interest rates on
Thursday so this could weigh marginally on Sterling but look for support at
1.8305, 1.8280 then 1.8220, and resistance on the topside at 1.8380 then
1.8415, with any move beyond this unlikely to breach last week’s high of
1.8450. The Euro has also come off around 1 cent against the dollar this
morning, although again further appreciation would seem unlikely unless
there’s some clarity as to how the election may play out. The downside
should now be fairly secure, but expect to find near term support at
1.2700, 1.2675 and 1.2625. The topside however does have the scope for some sizable gains, especially if the election result is disputed. In this
event, look for resistance levels to appear around 1.2800, 1.2830-40 then
close to the February high at 1.2900.
Provided by CMC Group New York– Chris Callander, Senior FX Dealer and Enis Mehmet, Head of Operations New York. For up to the moment FX market commentary, a 24 hotline is in place on 866-531-2604.
About CMC Group
CMC Group transacts over $1billion per day across its range of real-time online Foreign Exchange. It is one of the world’s leading online Foreign Exchange, Index and Equity Derivatives providers. Founded in 1989, CMC Group has operations in London, New York and Sydney. It is a member of the US NFA and ASIC in Australia. For further details on CMC Group visit www.cmcgroupplc.com.
DISCLAIMER: This forum and the information is provided as opinion and may prove to be inaccurate. CMC will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained herein. CMC Group do not provide investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a professional advisor is recommended.
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