Thursday January 20, 2005 - 19:29:22 GMT
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Cross Rips Higher
We had the release of Leading Indicators this morning that came in inline with expectations of up .2%. There was little reaction as the market was more interested in the Philly Survey that was released this afternoon. The number came out much worse than expected at 13.2% while economists were looking for 25.00%. We initially saw a pop in EUR/USD to 1.2980 off the news, but it quickly came off and headed back into the 1.2940-1.2960 channel it has been grinding in for the better part of the day. USD/JPY has been bid all day and has managed to decisively take out the 103.00 figure, which now looks like down side support, as it held despite the much worse data. The bid tone in USD/JPY has largely been a result of the action in the EUR/JPY cross, which has exploded after the recent beating it has taken. The cross initially tested the 133.00 figure this morning before never looking back as the shorts tried to real the pair in. A high print of 134.25 has just occurred, and the next point of contention looks to be 134.50 where there could be additional short covering.
Technically Speaking: EUR/USD has lagged the EUR/JPY move, which is an interesting divergence. The first Fib Retracement level in EUR/USD is 1.2930. In addition, the 1.2900-1.2930 area provides the base of the upward trend line on a weekly chart. The MACD signal line has just crossed on 60 minute, and the RSI failed to make a new low at the low of the day (1.2921).
GAIN an Edge: We look to get long EUR/USD at the bottom of the sideways channel that has been forming all day. We will leave a bid at 1.2952, If Done, we will leave a stop just below the low of the day at 1.2919 and we will look to take profit at just below yesterdays highs at 1.3115.
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