Monday June 14, 2004 - 18:52:05 GMT
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DOLLAR IS STRONG DESPITE WEAK DATA
The Dollar gained against the Jpy overnight and it managed to hold onto those gains into the N.Y session. Dollar/Jpy closed on Friday just above 110.00 and has traded above 111.00 to 111.45/55 and has maintained a bid tone for most of the session even with a bad Trade Balance number coming in at 48.3 versus the expected 44.5. Euro traded firm into the London and once it rose above 1.1985/90 it ran stops up to 1.2020/25. There were also comments from an ECB official that stated they were likely to retain their neutral tone on monetary policy through the summer and then start preparing the market for a tightening cycle in early 2005. This gave the Euro the added boost to rise to 1.2080/90 and basically did not give back any ground in the process. Retail sales came in as expected at 8:30 with a reading of 1.2%. These moves were started again by Euro/Jpy buying by a large Asian player through out their session into London and extended to N.Y. This drove Euro/Jpy through resistance of 133.00 and opened the flood gates to the highs of 134.35/45 just after N.Y lunchtime. Tomorrow brings more data with May CPI, Business Inventories, and University of Michigan as well as Mr. Greenspan will testify , but is not expected to comment on the currency markets.
TECHNICALLY SPEAKING Dollar/Jpy has surpassed a key resistance 110.50 level and traded through the 30 120 and 200 hr moving average on a 60 minute chart. It is also trading toward the top end of the Bollinger Band on this same 60 minute chart. The Relative Strength Index is a very positive 70.58. and the ADX is just below the 30 level. In the near term, there is support seen at 110.80 and 110.50.
GAIN AN EDGE We look to buy Dollar/Jpy on a dip to 110.80/85 with a stop below 110.50, looking for a move to 111.90
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