Friday June 4, 2004 - 17:53:44 GMT
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The much anticipated Unemployment rate and Increase in payrolls were released this morning. The majors had a very quiet night session ahead of the number, which was expected to be better than the projected 225k for payrolls. With the Euro heavy at 1.2200 right before the release, the actual 248k and unchanged 5.6% unemployment seemed to disappoint investors who were expecting a whopping increase, and thus failed to make a knifing one-directional move. The Euro skipped up to 1.2250, wiping out a lot of long dollar positions, before plummeting down to 1.2135, only to bounce right back up through its original levels and all the way up to 1.2275/80. As the dust settles now, the dollar seems slightly weaker across the board. The original concern of Fed rate hikes later this month seemed priced in now, with July federal fund rates indicating a 100% chance of a quarter-point increase. Meanwhile, OPEC has agreed to increase its total oil output by 2.5 million barrels by August 1st, but this seems to be inconsequential in today’s trading action. However, this decision might indicate a stronger dollar in the beginning of next week as there is little other economic data for the dollar to flirt with.
Technically Speaking: The Euro tested the 1.2280 break up after the economic data twice, which happens to be the upper Bollinger band, but couldn’t break through it, leading to believe that it holds as a good support level. The RSI is 77.66.
GAIN an Edge: We will sell at 1.2275 with a tight 1.2300 stop and a take profit at 1.2100.
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