Friday November 19, 2004 - 19:20:00 GMT
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The dollar gave back all of its gains and then some as traders scrambled to put back on USD shorts at the pivotal 1.3000 and 103.70 levels. In a frenetic trading session, EUR/USD roared back from 1.2941 to 1.3070 as USD/JPY nosedived from 104.25 to an alarming 102.70. Meanwhile, USD/CHF swooned from 1.1730 to 1.1579 and GBP/USD exploded from 1.8480 to 1.8612. Today’s reversal was certainly surprising given the magnitude o f this weekend’s upcoming G-20 meeting, but perhaps some “pre- empting” from Fed Chairman Greenspan encouraged the dollar bears to jump back on the proverbial horse. So once again, intervention fears will linger and the market will likely fret from initiating fresh dollar shorts but as the Fed Chairman stated: Do intervention efforts create protracted changes or are they just short term fixes? Either way, we expect another riveting week of trade in the f/x markets.
We see important resistance still at the 1.3075-1.3100 region. Support checks in at 1.3025 and 1.2970.
GAIN AN EDGE
We will sell EUR/USD at 1.3090 with a 1.3110 stop and 1.2985 limit. .
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