Friday March 11, 2005 - 17:05:17 GMT
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The Voice of FXstreet.com - Weekly Report
ARE DOLLAR HEROES LEAVING THE BOAT?
Trade deficit widened to $58.3bln from previous $55.7bln. Therefore, a weaker dollar does not seem the best of the solutions, taking into account big USD supporter, Japan, is diversifying its foreign exchange reserves to another currencies, joining the process the UAE and other countries started in 2004.
The good unemployment report from last week has been followed by a mildly negative trade deficit number, out today to $58.3blln, widening from previous $55.7bln, not matching forecasts, which were positive on the number to come out, basically because of the weak dollar rates across the board.
Technically speaking, dollar sellers had a good excuse to keep on pressing their own way in the markets, while dollar heroes looked to be disappearing gradually. However, some of them are still left, and keep the weekly charts mildly positive for the greenback, specially against the “other dollars” block : NZD, CAD, and AUD. The latter of the three barely moved on the upside this week despite the selling pressure on the USD across the board. NZD and CAD longed pretty nicely, but the accumulation process on a weekly basis can be near to topping out, who knows.
The main beneficiaries of this situation were the EUR and the CHF, both with solid gains this week. GBP was rather diappointing and the JPY, though gaining some ground, looked very well topped by big hands around the 104-103.50 level.
If I had to chance a word of what I said in previous weeks, I wouldn’t be writing this report. Despite the recent rally, well supported on a daily-based charts, the weekly picture, despite new USD lows across the board, looks encouraging. Obviously, the current environment is not favourable, but if we agree that technicals can forecast fundamental moves, if we were set to see (probably) new highs against the USD, they would be very limited, and the recovery would be just some weeks away.
This week’s closing levels (at the time of this writing) : EUR/USD 1.3465 (+240), USD/CHF 1.15 (-245), GBPUSD 1.9260 (+120), EUR/GBP 0.6990 (+90), USD/JPY 103.95 (-115), USD/CAD 1.2040 (-250), AUD/USD 0.7935 (+15), NZD/USD 0.7395 (+55), EUR/CHF 1.5485 (-45), EUR/JPY 139.95 (+105), GBP/CHF 2.2160 (-330), GBP/JPY 200.15 (-110). CHF and EUR main winners for this week, where we have seen another leg of dollar selling.
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