Monday November 22, 2004 - 13:45:23 GMT
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CMC - www.cmcforex.com
Forex: Technicals may slow dollar decline in the short term.
The greenback looks set to remain under siege in the coming days as rising
oil prices compound the outcome of the weekend’s G20 summit in Berlin.
Central banks are unwilling to intervene in the dollar’s slide, leaving the
FOMC to contemplate further rate hikes, but such action risks stifling
economic growth and exaggerating the already bad trade deficit. With little
in the way of economic data due for release through today’s session,
traders are going to be left largely to reassess the technical aspects of
the market, so although this may help slow the dollar’s decline marginally,
consensus remains that we’ll see further devaluation ahead of the year end.
This is particularly true of the Euro where the prospect of rate hikes by
the ECB early in 2005 look set to keep the common currency squarely in
favour and close to the 1.30 level in the near term. Expect to find support
at 1.2990-1.3000 then 1.2950, whilst resistance on the topside should cut
in at 1.3050-55, 1.3065-75 then 1.3120. Although cable may still have some
scope left against the dollar in the near term, the fact that the MPC is
now unlikely to hike its rates further should keep any appreciation to a
minimum. Expect to see strong support at 1.8500, followed by 1.8465, whilst
on the topside look for resistance at 1.8615, 1.8640 then 1.8730.
Provided by CMC Group New York– Chris Callander, Senior FX Dealer and Enis Mehmet, Head of Operations New York. For up to the moment FX market commentary, a 24 hotline is in place on 866-531-2604.
About CMC Group
CMC Group transacts over $1billion per day across its range of real-time online Foreign Exchange. It is one of the world’s leading online Foreign Exchange, Index and Equity Derivatives providers. Founded in 1989, CMC Group has operations in London, New York and Sydney. It is a member of the US NFA and ASIC in Australia. For further details on CMC Group visit www.cmcgroupplc.com.
DISCLAIMER: This forum and the information is provided as opinion and may prove to be inaccurate. CMC will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained herein. CMC Group do not provide investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a professional advisor is recommended.
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