Thursday June 17, 2004 - 18:40:40 GMT
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Tight Reins on the Dollar
The markets were reserved despite the plethora of economic data released today. The jobless claims number came in better than expected at 336 (est. 340k) while PPI was slightly higher, at 0.8% as opposed to the expected 0.6%. Then the leading indicators did not fail estimates at 0.5%, and the Philly Fed boosted confidence in the economy at 28.9% versus the consensus of 25.3. The result was not much more than a yawn however, as the Greenback seems to be priced firmly in for a 25 basis point hike, with the likelihood of anything more for the time being seemingly dim. The Sterling rallied not only against the dollar but the Euro as well, owing to speculation that the BoE might raise rates again in July. And finally, the Yen rose against all its counterparts because speculators are betting that the Japanese economy will extend its expansion. Oil futures also rose for a second day in a row, due to the sabotaging of Iraqi pipelines. This event, coupled with the kidnapping in Saudi Arabia have raised geopolitical tensions again, which could further explain why the dollar failed to stage a rally today.
TECHNICALLY SPEAKING Gbp/Usd is trading above all its 30,120 and 200 hr moving averages on a 60 minute chart. There is trend line support seen at 1.8325 in the near time. There is also a short term up channel, that comes in at 1.8280 as support. The Relative Strength Index is trading just above the neutral 50 reading on this same 60 minute chart. There is also resistance 1.8390-1.8400.
GAIN AN EDGE We look to sell a break of the trend channel at 1.8270/75 with a tight stop above 1.8305 and a take profit of 1.8190.
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