Tuesday July 13, 2004 - 18:10:59 GMT
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POSITIVE U.S. DATA DRIVES THE DOLLAR
The dollar gained against its G-7 counterparts behind a better than expected US Trade Balance number (-46 billion). EUR/USD dropped from 1.2370 to 1.2300 while USD/JPY rose from 108.25 to 109.39. Meanwhile, GBP/USD knifed from 1.8620 to 1.8530 and USD/CAD screeched from 1.3195 to 1.3300. Today’s data wasn’t really all that exceptional with regards to the trade deficit or the greenback. But some stop loss orders in EUR/USD at 1.2340 became vulnerable once the news hit and a flurry of momentum type dollar buying ensued shortly after. Breaches of 1.2410 (USD/CHF) and 109.55 (USD/JPY) could surely propel the dollar bulls even further but keep in mind there are several more key data release due out this week. Also, some keen players were seen fading this latest dollar rally perhaps looking for a weak Retail Sales number due out tomorrow.
TECHNICALLY SPEAKING We see key medium term support at 1.2260 in EUR/USD as well as the key psychological 1.2300. The topside shows congestion at 1.2370-90 and a double top formation at 1.2430.
GAIN AN EDGE We will buy EUR/USD at 1.2265 with a 1.2220 stop and 1.2365 limit.
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