Wednesday June 8, 2005 - 04:48:20 GMT
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Tricom Futures and Foreign Exchange -
Forex: Beware, this EUR recovery could be a "Dead Cat" bounce.
Throughout the Asian session today, we've seen the Yen weaken across the board (USD/JPY is knocking into resistance at 107.00, and EUR/JPY has broken above 131.30). We've also seen the EUR/USD make a higher high above yesterday's high, but again failed to break above 1.2320. While the EUR/USD remains below the USD/CHF, I remain bullish USD. Should they crossover again, possibly around 1.2370 (the gap at this stage is 130 pips) I will then re-assess my stance. Elsewhere, the Australian central bank left rates on-hold, as expected.
The USD edged lower on Tuesday, especially against higher-yielding currencies, after the market interpreted comments by Federal Reserve Chairman Alan Greenspan to mean the Fed may soon pause in raising official interest rates.
In comments made during Asian trading hours Tuesday, Greenspan said befuddling "new forces" that are unlikely to change soon have kept long-term rates low. He also said the view that markets are flagging economic weakness is "a credible notion," though he said he did not fully embrace that view.
U.S. Treasury debt prices climbed on Tuesday after comments from Fed Chairman Alan Greenspan overnight appeared to leave open the chance of a pause in interest rate hikes.
Interestingly, dealers focused more keenly on what Greenspan did not say than on his actual statement to a bankers' conference in Beijing via satellite from Washington.
Investors had worried that the Federal Reserve chief might signal the central bank was far from finished in tightening monetary policy in an attempt to balance comments from other policy-makers flagging that possibility.
U.S. stocks pared gains on Tuesday afternoon in program trading after a rally sparked by Federal Reserve Chairman Alan Greenspan's comments that investors said suggested the central bank was near the end of its campaign of interest-rate hikes.
Today’s Top Trades
· Buy USD/CHF on dips to 1.2450-40
. Sell GBP/JPY around 196.15-20
. Sell EUR/JPY around 131.30-40
. Buy AUD/NZD on dips to 1.0700-10
For more ideas send me an email, [email protected]
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