Wednesday July 6, 2005 - 10:14:00 GMT
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First signs of Exhaustion
Good morning everyone from FXstreet.com. Markets will be watching closely the G-8 summit starting today, with several issues to be discussed. Check out Latest Forex News section to review overnight economic stories.
Forex Technicals at a glance
Dollar advance looks in a pause at the moment. Strong bidding in the european and japanese currencies has halted the dollar bulls upmove. Quite surprising the over-extended USD upmove has not hit the 1.32 level against the swiss franc. Anyway, the 1.3075-1.3200 area is a tough resistance and won’t be easily cleared for now, therefore I expect at least a sideways move these days (until the NFP is released on Friday, at least), with no major levels broken. It looks like the highs in the dollar have been set for now, awaiting for the new impulse. However, all that I have written can change in 5 minutes between 12:30-12:35PM on Friday, as NFP data always shakes the market heavily.
Point of View: It looks like the Euro decline, so welcome by european monetary authorities (they will one day explain why ... with serious reasons), has found strong bidding among those who believe more depreciation is either irrational or not needed for economic sustainability and among those speculators considering current levels for bidding. Crude Oil at record highs and Euro making new lows against the dollar (the currency in which crude oil is quoted), could just accelerate the european economy slowdown, turning the situation to a very serious one. Japan’s history repeating in the eurozone? We’ll see ...
Trading Tipsaily studies indicate that further dollar gains may be considered as extreme moves rather than solid positions, therefore if indicators turn dollar-bearish (confirm the signals) we will be able to long currencies against the dollar with good risk-reward.
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