Tuesday January 24, 2006 - 06:10:48 GMT
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Tricom Futures and Foreign Exchange -
Forex: The EUR's gone hard, but has it gone too fast??
The dollar came off day lows as oil prices retreated slightly and as Wall St got off to a relatively strong start.
Overnight, the euro broke above its recent range and then made substantial gains, reaching a four-month high of 1.2290 usd. The Swiss franc -- often viewed as a safe-haven currency also reached a four-month high against the dollar.
Over the past few weeks there have been renewed concerns about the twin current account and budget deficits in the US.
Interest rate differentials are also firmly on the market's radar screen, with US rates looking close to peaking while European Central Bank officials increasingly talk up the prospect of further rate hikes in the coming months.
With the lack of major economic data out of the US this week, the market is open to being driven by technical factors, such as critical support and resistance levels.
The EUR/USD appears to have broken above my suggested trading range of yesterday, 1.2180-1.2280. Thereby setting the scene for another new range of: 1.2260-1.2360. Similarly, USD/CHF has broken under 1.2610-00, the lower end of the range i suggested yesterday, 1.2700-1.2600. This now suggests a range of 1.2610-1.2500 is on the cards.
Today's Economic Release:
Today's Top Trades
- Buy EUR/USD on dips towards 1.2260-70, with stops under 1.2220
For more ideas send me an email, [email protected]
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