Wednesday January 12, 2005 - 12:19:25 GMT
Share This Story
ACM REFCO - www.ac-markets.com
FX Daily Technical Strategy
Will Dollar Reach 1.30?
The most fascinating aspect of FX trading today will be the battle between dollar bulls and bears to tag the 1.3000 figure should the Trade Balance print at or below expectations of -$53.9 Billion. After all, whether US Trade Balance hits -$53.9 Billion or the more bearish calls of -$55 Billion matters little in the broad context of increasingly weak US Balance Sheet position. However, as we’ve been noting from the beginning of the week, the 1.30 figure is an extremely tempting target for dealers looking to take out the large amount of stops clustered around that psychologically important number.
Most FX analysts expect to see an improvement in the numbers due to a significant decline in the price of oil which constitutes such a large part of US imports. However, as we pointed out yesterday, given the large jump in Chinese exports “it’s quite possible that any savings from lower oil imports were quickly recycled into additional purchases of Chinese goods, keeping the US Trade deficit at record levels for a second month in a row.”
Unless the number is extraordinarily bullish (less that $50 Billion) we stick to our view that most the rally in the dollar is done for now, as Japanese and European data continues to improve or stabilize while US Balance Sheet problems persist. In short, while the 1.30 level could easily fall under the pressure of a dealer stop hunt, the euro is likely to find support shortly thereafter.
FX Spot Overnight
- EUR slightly below 31 at 3094 awaiting US Trade data
- JPY at 103.31 as eco data continue to show a rebound
- GBP hovers 8730 although Visible Trade Balance improves
- CHF stays quiet at 1830
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."