Wednesday April 6, 2005 - 19:12:07 GMT
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GREENBACK REMAINS STRONG AGAINST THE JPY
The risk of more USD pain seems to revolve around positions and US assets. The testimony from Greenspan was to be the headline event on an otherwise quiet news day but failed to excite the markets at all. Oil remains on the mind of all markets so the inventories will matter going forward. As for much else - itís all about the trend and the risk appetite - both of which have moderated. RBA on hold and BOJ on hold are the top news stories and their effect on FX was to send both currencies weaker. Not raising rates hurts a currency - maybe something to remember as the USD bulls gather for another day at the FX ranch. The main driver for the past few sessions continue to be JPY and JPY crosses. Japanese investors are shifting funds to higher yielding bonds in the US and Europe at the start of their fiscal year. Demand for the JPY has diminished and the Dollar has taken front seat for a northerly approach. Today the Dollar failed to test the 109.00 option barrier levels heading into the mid-day but also failed to fall below the key 108.50/60 after putting in a high of 108.76/80.
Dollar/JPY after putting in a corrective low of 107.87 last night managed to drive north through resistance at 108.20 and 108.50/55. There is resistance seen at 109.00/20 to the top side and support at 108.20 and 107.80/90. The 55 hr moving average comes in at 108.32 on a 60 minute chart.
GAIN AN EDGE
We are short at current levels (108.65/70) will sell more at 108.95 with a stop above 109.30 and a take profit of 107.90
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