Monday May 23, 2005 - 22:26:24 GMT
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Tricom Futures and Foreign Exchange -
Forex: Buy in May, and go away
Despite the overnight action where the EUR managed to regain some lost ground overnight, I remain USD positive. Iím inclined to think that we can use this strength in the EUR to get short around 1.2600, and/or use weakness in USD/CHF to get long around 1.2300 The EUR/USD and USD/CHF remain 250 points apart, after being 500 points apart at the start of last week. When these 2 crosses crossover, we can normally expect them to continue in this direction for another 400-600 points, as such, we could see the EUR down around 1.2000.
U.S. Treasury debt prices rose strongly on Monday, picking up an early bid from news of a smaller than expected two-year note auction set for Wednesday. The extended mid-session rally originated in Chicago Board of Trade futures, where speculators pushed June 30-year bonds through resistance at 116-21/32, the contract high from Feb. 9.
Most dealers expect trading to stagnate before minutes from the May 3 Federal Open Market Committee meeting are issued on Tuesday, potentially shedding light on how seriously the central bank views the threat of inflation as well as its impression of the recent "soft patch."
The minutes "should set the market's psychological tone for interpreting future Fed policy,"
U.S. stocks picked up their momentum of last week on Monday, with shares of oil companies and software makers leading a rally that spanned the major indexes.
Both sectors benefited from brokerage upgrades, while a slight pickup in the price of crude oil failed to exert much gravity on the market.
Todayís Economic Releases:
∑ US: FOMC minutes from May 3 meeting
∑ US: Existing Home Sales
Todayís Top Trades
∑ Buy AUD/NZD around 1.0660, with stops under 1.0620.
∑ Buy USD/CHF around 1.2310-00, with a 50 point stop
∑ Sell EUR/JPY around 135.80, with a 50 point stop
For more ideas send me an email, [email protected]
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