Thursday June 3, 2004 - 18:53:18 GMT
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Cross Currencies Ruled The Price Action for the Day
The U.S. dollar posted mix results against the Majors as Initial Jobless Claims came in slightly higher then expected at 339k vs. expectations of 335k, the ISM Non-Manufacturing number came in slightly worse at 65.2 vs. expectations of 66, and Factory Orders saw a decline of 1.7 vs. expectations of 1.4. The resignation of CIA Director George Tenet was met with a muted response as little impact was seen in the dollar. Again, Oil remained a focus on the day as we saw a breech of the key $40 level on the front month contract (speculation of increased pumping) and Spot Gold was off $3.00 penetrating the $400 level. These declines were evident in the commodity currencies as bids got hit in both AUD/USD and USD/CAD. USD/CAD eventually firmed up and retraced some of the weakness but the AUD/USD remained under pressure. The USD/YEN remained bid and made a run at 111.60 before eventually fading. Much of the action in USD/YEN could be attributed to the large move in EUR/YEN which was bid up to a high 136.30 before fading. There was some action to note in GBP/JPY, which went out yesterday at 201.68 and made a high 204.80 today.
Technically Speaking: The theme remains the same for the euro as it continues to find bids on dips. The RSI is 50.20 and the Slow Stochastic is reading 58.41. There is continued support on dips to 1.2160 and stops now are below the 1.2150 level. The favored move is still to the up side until we break 1.2150.
Gain an Edge: We look to continue to buy on dips in the euro as we look for a move to 1.2360. Our stop loss will be 1.2150 and we will reverse and go short there with a 1.2055 take profit.
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