Wednesday May 26, 2004 - 17:37:33 GMT
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Greenback Holds Ground
The dollar seems to be forming a base as worse than expected news could not get the dollar to give up more ground than what most thought after the data that came out of NY today. The dollar traded to a low 1.2650 over night but we could not break below 1.2670 in NY. The euro made a high of 1.2142 last night but was unable to sustain a break above 1.2130 today as offers were abound. The talk all day has not been concerned as much with the rising oil prices although we saw July crude oil remain firm to soft on the day; the new worries of a possible summer terrorist attack has the market jittery now as there is strong reports that terrorists are here in the states and planning a possible attack. The US is saying that there will not be a raise in the terror alert as of yet but it is definitely possible to see that happen before the holiday weekend comes. The dollar traded off its early morning highs of 1.2735 to 1.2675 after the worse than expected Durable Goods orders came in at -2.9. The market consensus was calling for a -.9. The greenback still held its ground after the much worse New Home Sales drop of 11.8 in April 1.093 million; the worst drop in 10 years. This after the previous month was a record pace of 1.228 in March. The market consensus was 1.195 million. The market has been steady as we lead up to the holiday weekend here in the states. We did see some euro stops get ran at 1.2080 as we drew near the London close but we quickly bounced back to 1.2115 as the cross turned bid as well and the dollar against the yen traded higher in the late morning as well.
Technically Speaking: The dollar is still in danger of falling lower especially before the weekend as fears of a terrorist attack still swirl and a possible raise in the terror alert on the horizon. The slow stochastic is getting softer as the day lags on and is reading 65.03 and falling, the RSI is slowly coming off as well holding just above 50 at 52.09.
Gain an Edge: We look to sell dollars on the rallies 1.2750-1.2810 with a stop above 1.2880. Our take profit is 1.2465.
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