Friday January 7, 2005 - 19:48:05 GMT
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After a payroll number that came in at +157k and was expected +175k it really was a non event except for the noise before the release that had Euro trade as low as 1.3165 and Dollar/Jpy jump to 104.80. Euro spiked to 1.3240 after the release only to be met by good resistance and pushed this pair right back to where we started pre payroll release. The real story was Treasury Secretary Snowís comments that stated, The United States supports a strong dollar and wants to "do things", including cutting its deficit, to support the currency's strength, Treasury Secretary John Snow said on Friday. Our policy is a strong dollar, we support the strong dollar, a strong dollar is in our national interest. We want to do things to sustain the strength of the dollar, among them is going to the Congress to work on the deficit, to bring the deficit down," Snow told CNBC television. "By doing that we generate more savings in the United States, and that will help us deal with the fundamentals of the economy in a way that is beneficial," Snow said, adding that making tax cuts permanent was also necessary to keep the economy on a strong growth path. This was enough to send Euro on a free-fall to session lows of 1.3025 with no real pull back on the move from 1.3200 to current lows. Dollar/Jpy went bid on the back of this and also didnít give back all that much in the overall scope of things. Traders are talking about this being a trend now and we will have to wait to see how the Asianís and the Europeans handle the further decline of the Euro after London packed it in for the weekend.
TECHNICALLY SPEAKING A look at the daily euro chart has Euro beginning to look like a trend. Before going to fast on a 60 minute chart a break of the 1.3140/50 level was a vital break and a close below that could signal more erosion. Short term support is seen at 1.3000/20 with resistance at 1.3085/95 and also 1.3130/40. The Relative Strength Index is at 32.01.
GAIN AN EDGE We look to sell a rally to 1.3105/10 with a stop above 1.3155 and a take profit of 1.3010/20
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