Thursday March 10, 2005 - 22:29:59 GMT
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DOLLAR MAINTAINS FOOTING AHEAD OF TRADE BALANCE
Although the Finance Ministry denied strongly that Japanese PM Koizumi's comments on reserves diversification signaled a change in policy and JPY regained most of the lost ground, the sell-off in US bonds did not unwind nearly to the same degree, suggesting that the market gives credence to diversification rumors, if not specifically Japanese, then more broadly among large reserve holders. The big question is which currency stands to benefit the most from such diversification. The choice is between high yield and large external imbalances (UK, Australia,) and low yield and external balance (Euro, CHF, JPY,) After a decent size sell-off in the Dollar overnight sessions it managed to gain back some ground and maintain some stability going into tomorrows Trade Figure at 8:30 EST. Initial Jobless Claims rose 17K to 327K for the week ending March 5th. Euro failed to excite today trading in very tight range heading into NY mid day.
AUD/USD after putting in a high over night at .7981 has retraced back to .7870. There is trend line support seen on a 60 minute chart at .7853 and also resistance at .7925/35 in the near term. Key trend line support was broken at .7920.
GAIN AN EDGE
We look to buy Aud/Usd on a dip to .7855 with a stop below .7820 and a take profit of .7915
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