Wednesday July 21, 2004 - 19:50:13 GMT
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DOLLAR RALLIES ON INTREST RATE SPECULATION
The Dollar got a gripping boost today starting with the overnight sell off of Euro and GBP prior to the N.Y. traderís arrival. GBP/USD started it off with a decision of the MPC (9 to 0) in favor of leaving rates alone in the short term. This brought Euro down with it. We also had Mr. Greenspanís testimony this morning and yesterday that basically hinted that the U.S economy is growing fast enough to justify more rate increases going forward. It was widely thought that because of the bad data released as of late, that the increases would be put on hold. Dollar/Jpy jumped from 108.40/50 in late London to N.Y. session highs of 110.29/33. On the back side of this Euro traded from highs before N.Y got in of 1.2350 to session lows of 1.2210/13. Tonight brings the Japanese June trade balance that should keep the markets very volatile heading into the end of the week.
TECHNICALLY SPEAKING Dollar/Jpy has surpassed key resistance at 108.80/90 and further resistance at 109.20/30. There is trend line support seen at 109.80 and 109.60 on a 60 minute chart. There is also top side resistance seen at 110.30/50. The Relative Strength Index has a very positive reading of 74.25 on this same 60 minute chart.
GAIN AN EDGE We look to get long Dollar/Jpy on a dip back to 109.65/75 with a stop below 109.30 and a target of 110.45
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