Tuesday July 12, 2005 - 09:27:44 GMT
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Dollar gets sold-off overnight
Good morning everyone from FXstreet.com. US Stock Markets keep in the rise and the DJIA closed again above the 10,500 mark.
Forex Technicals at a glance
Dollar sold-off overnight to confirm the bearish expectations pointed out in this report for some days. The retracement of the current moves can last a little longer and drive the dollar to lower levels, get a breathe of fresh air, and move back up. Fibonacci daily retracement levels are yet to be touched on the majors and that is why this retracement move might not be over. However, despite currentís volatile one-way moves and the fact that both the euro and the pound have gained over 300 pips in 2 sessions, respectively, I expect the volatility to slow down and the current level areas to hold for a while, but keep an eye on the fact that there has been a good deal of money flowing in to the european currencies and that a new breakout canít be ruled out.
Point of View:It is quite true that money gets in and out of any investment quite easily, but it is also true that it gets out of it faster than it gets in. What do you think? Dollar was well bid up until Friday when, suddenly, everything changed. The fresh euro and pound longs were dramaically helped by the strong short covering (money getting out of the dollar) that took place in both pairs. The result, as expected, was a one-way traffic move in continental currencies favour.
Trading Tips:Current Eur/Jpy level is maybe not yet as attractive as 136.20 would be, but longing the japanese currency against the euro could work.
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