Tuesday November 2, 2004 - 18:51:15 GMT
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GCI Financial - www.gcitrading.com
Forex Market Commentary and Analysis (2 November 2004)
The euro extended its recent losses vis-à-vis the U.S. dollar today as the single currency tested bids around the US$ 1.2680 level after encountering selling pressure around the $1.2755 level. Stops were hit below the $1.2735/ 10 levels during the move lower. Chartists are now citing the $1.2630 level as the next level of technical support for the pair. All eyes are on the outcome of today’s U.S. Presidential election. Most traders cite a quick resolution to today’s election as being dollar-positive with any sign of the decision being legally-contested likely to be dollar-negative. The dollar has been pummeled sharply over the past couple of weeks so the dollar could easily get a bounce higher as traders unwind long euro positions. There is no significant data scheduled for release today in the U.S. After today’s election, attention will quickly focus on Friday’s October non-farm payrolls. Euro offers are now seen around the $1.2735/55 levels.
The yen gained a small amount of ground vis-à-vis the U.S. dollar today as the greenback tested bids around the ¥ 106.20 level after running out of steam around the ¥106.75 level during Australasian dealing. Traders continue to talk about the possibility of yen-selling intervention by Bank of Japan but some believe this will not take place above a ¥103 handle. The Nikkei reported that Japanese think tanks are predicting economic growth at an annualized rate of 2% between July and September, an acceleration from the 1.3% growth rate between April and June. Dealers are suggesting a quick resolution to the U.S. Presidential election could see the greenback back at the ¥107.50 level. Dollar bids are cited around the ¥106.20 level. The euro moved lower vis-à-vis the yen as the single currency tested bids around the ¥134.75 level after failing to get above the ¥135.90 level. The cross actually traded at a level not seen since 13 October before recovering. Euro offers are seen around the ¥135.70 level.
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