Thursday February 17, 2005 - 11:38:57 GMT
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Black Swan Capital - www.blackswantrading.com
The dollar, on the one hand...
“In fact, the degree by which you think you know what is going to happen next, is equal to the degree to which you will fail as a trader.”
Mark Douglas, Trading in the Zone
Well, according to most market reaction, Fed Chairman Greenspan was neither too “hawkish” nor “dovish”. Once again the Maestro seemed to strike a chord for all listeners. The economy is chugging along just fine on the one hand, no mention of Bubblesville—a common moniker for towns and cities popping up all across America. On the other hand, interest rates are “fairly low” relative to inflation. And yet, on the other hand inflation seems well contained. Proving the adage once again that good economists have an infinite supply of hands up their sleeves.
The dollar first rallied when Mr. Greenspan began speaking yesterday, but has since given some ground—which at the moment indicates we might see this dollar “correction” continue.
On the other hand, on a daily basis we’ve already seen a strong move in many of the currencies against the dollar without a rest. And we are approaching the all-important, or should I say, self-fulfilling Fibonacci retracement levels in some key currencies. And though the trend is our friend, intraday, the euro and pound appear (key word use by those hedging their bets) “overbought,” while the Swiss appears “oversold.”
Here’s look at the daily charts for the three, with fibs attached…
You guessed it based on today’s ramble! I’m fresh out of hands and any chance of providing meaningful insight. Take care and have a great trading day.
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