Friday November 5, 2004 - 19:45:41 GMT
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Strong Non-Farm Report Can't Stop Bleeding
The dollar fell to a record low against the euro and multi year lows against its G-7 counterparts even though the US Non Farm Payroll Report was much better than expected (330k versus expected 180k). In almost unbelievable fashion, EUR/USD exploded from a post Non Farm Payroll low of 1.2765 to a new all time high of 1.2953. In addition, USD/CHF fell from 1.2010 to an astonishing 1.1793 while GBP/USD also traded in remarkable fashion (1.8305 to 1.8560). And furthermore, both commodity currency pairs (AUD/USD,.7530 to7635 and USD/CAD 1.2125 to 1.1965) followed suit. Surely, traders have begun to wonder just how much more the greenback would have tanked if the Payrolls number were bad. But make no mistake about it: the dollar is already under severe pressure. Dovish remarks from German Chancellor Schroeder only exacerbated the dollar’s troubles and now it looks as if it will be left up to the central banks to see just how far the freefall extends.
TECHNICALLY SPEAKING The break above yesterday’s 1.2845 lows and 1.2898 highs started today’s moves. The move through the 2004 high of 1.2925 only adds to the bullish EUR scenario. We expect 1.3000 to provide KEY psychological resistance.
GAIN AN EDGE We will sell EUR/USD at 1.2990 with a 1.3010 stop and a 1.2875 limit.
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