Thursday November 4, 2004 - 21:37:04 GMT
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Dollar Steadies Itself Pre Non-Farm Report
The dollar looks poised to stay within its current range throughout the night into tomorrows ever important Non-Farm Payroll Report. The session started (106.05/10) with a strong dollar sell off to push the USD/JPY to new lows not seen since April (105.65/70). Since then the high has been 106.15/20 and has not drifted below the figure since. EUR/USD saw a similar move pushing the Euro to a high of 1.2900/05 and as low as 1.2850/55 and has played that range since. USD/CAD also played a 50 point range all day with a low of 1.2030/50 and a high of 1.2080/85. Talks of bids around 1.2850 seem to be providing good support for this trend to continue ahead of the Payroll Report. More long term dollar weakness is expected as major structural weakness such as the trade deficit and current account balance have now came sharply back into focus as the election is now behind us. This seems to point out the obvious of a continued lower trending dollar, but the monkey wrench could come tomorrow as a better than expected number (175K) could cause a sharp correction in an already extremely oversold USD. I would expect to see good opportunities playing theses ranges overnight and in the London session as the ranges should hold the course.
TECHNICALLY SPEAKING We see good support of 1.2850 and again at 1.2830 in the 60 minute EUR/USD chart which provided resistance earlier in the week. On the top side 1.2900 looks to have formed a double top (60) and is a good resistance level to play over night.
GAIN AN EDGE We look to buy dips in EUR/USD of 1.2835/45 with a stop of 1.2825 and a take profit of 1.2885.
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