Wednesday January 5, 2005 - 19:05:58 GMT
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DOLLAR GIVES UP SOME GROUND
The Dollar paused in New York after putting in highs against the JPY and the Euro overnight continuing yesterday’s gains across the board. In N.Y. there was good pressure put on the Euro to start off the day after pushing through 1.3220/30 only to be met by Asian central bank buying just below 1.3220. This created good support for the Euro and had this pair chopping between 1.3230 and 1.3255 for a good part of the morning before resistance gave way at 1.3255/60 and pushed this pair back above 1.3300 before settling in just south of 1.3300 at N.Y lunch. On the economic release front the U.S. ISM non-manufacturing “business activity” index that improved to 63.1 (expected 61.0). The gain left the index at the highest level since July and the component data implied an ISM adjusted basis of 58.8 from 57.8. All components remained strong, reflecting ongoing strength in the U.S economy. Dollar/Jpy gave back the highs of 105.00 in London trading and slipped back to 103.75/80. Eur/Jpy was the catalyst for both Euro and Dollar/Jpy pressure after trading from 138.95/00 to N.Y. session lows of 137.75/80. Tomorrow brings Initial Claims at 8:30 EST.
TECHNICALLY SPEAKING There is good support at 1.3200/20 on the 60 minute chart and resistance comes in at 1.3310/15 and 1.3340/50 in the near term. Euro is trading below all its 30 120 and 200 hr moving averages on the same 60 minute chart. The Relative Strength Index is waning and the ADX has turned and is currently 40.12.
GAIN AN EDGE We look to sell Euro on a push higher to 1.3325/40 with a stop above 1.3360 and a take profit of 1.3255
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