Monday November 8, 2004 - 20:21:06 GMT
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The NY session was very uneventful today as we worked a range of 1.2905 to 1.2965. The dollar once again is not able to show any signs of life after the NFP number on Friday. Most in this market are very content to now buy euro on every dip and sell the dollars on every rally until proven wrong. Wednesday is the FOMC announcement and most are looking for a 25 basis point increase. This could produce a bounce in the dollar but what happens next? Traders are more than likely to sell into the rally and unless further rhetoric suggests anything different the dollar is in a downtrend and does not look to be gaining any help. The talk is of a steady decline in the greenback even though the government will suggest a strong dollar policy as it has for the past three years now. The euro can possibly break 1.3000 in the coming sessions and although some suggest it will hurt the euro zone profits in the long run nobody is slowing the increase either. A move to 1.3500-1.4000 is possible before we see potentially any interference by the ECB. The BOJ has been said to be in checking rates once in a while but with that there has been continued selling and no intervention looks likely quite yet. The dollar fell against the yen to 105.25 and there looks to be no intervention thoughts until maybe 100.00. Crude oil was lower today as well as gold. The Aussie dollar being a touch lower on talk that the RBA will leave rates on hold for the remainder of the year.
Technically Speaking: The slow stochastic on the hourly is reading 34.75 and the slow stochastic is 45.95, the euro looks well supported on the dips and although stops loom below 1.2880 we hear of more bids in the 1.2865-50 area. If the euro is unable to post a new high, we could see a bigger pullback to the post NFP number of 1.2760.
Gain an Edge: Buy the dips in euro until the break of 1.2760. We look to buy 1.2855 with a 1.2760 stop and our objective is 1.3020.
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