Tuesday June 21, 2005 - 04:59:57 GMT
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Tricom Futures and Foreign Exchange -
Forex: Grab a snorkel everybody, 1.2000 here we come
The EUR/USD remained capped in early trade today. Pre-Asia we saw a test of 1.2130, but the market quickly bounced back to 1.2150, but has been unable to make any further headway since. I think 1.2160-70 will cap any advance today, opening up for a test of 1.2080 later today. The USD/CHF closed back above 1.2700, setting the stage for another test above 1.2760. The USD/JPY will struggle around 109.70 to advance further, and will fail at a push above 110.00 on the first try, but look out when we do eventually break through.
The USD was sharply higher against the euro on increasing speculation that the European Central Bank could cut interest rates in the months to come, as well as ongoing EU political concerns. An ECB source was earlier reported as saying that European Central Bank policymakers may start considering an interest rate cut if euro zone data fail to show any signs of improvement in the economy. Recent data have suggested that the euro zone economy will not pick up in the second half of the year, as the ECB has been forecasting, the source was cited as saying.
U.S. Treasury debt prices slipped on Monday as two regional Federal Reserve presidents suggested more interest rate increases are on tap from the central bank.
Losses were pared in late trading as crude oil futures in New York surged to a second consecutive day of record highs and neared the $60 per barrel level, reigniting worries about an impediment to economic growth from high energy costs.
U.S. stocks turned positive on Monday after being down earlier on record high oil prices, signalling that investors are becoming more accustomed to the prospect of high energy costs.
Today’s Economic Releases:
Today’s Top Trades
· Sell EUR/USD strength towards 1.2160-70
. Buy USD/CHF around 1.2690-1.2700
. Buy AUD/NZD around 1.0830-40.
For more ideas send me an email, [email protected]
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