Wednesday May 5, 2004 - 18:12:51 GMT
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DOLLAR TURNS ON ATHENS BOMBING
The Dollar extended recent weakness overnight. The mood remains bearish, looking toward US Non Farm Payroll report due this Friday to lead next move. USD/CHF lead the initial move on news of the bomb in Athens. Plenty of stops were taken out above 1.2150 level in EUR/USD and positive European Data helped fuel the Euro buying. Euro put in a pre N.Y high of 1.2175/80 before retreating down toward 1.2115/20 on profit taking. Euro at mid day was back up toward the highs and Dollar/Jpy continued to struggle and could be in for a wash out. Tomorrow brings interest rate decisions from both the Bank of England and the ECB that should jump start the N.Y morning. The Athens bombings 100 days ahead of the opening of the Olympic Games drove markets to sell Dollars and swing into CHF for safety. This was basically the catalyst that has turned the Dollar in the direction of fade the rally. The remainder of the week should provide a sense of direction for the Greenback withmore data and interest rate decision.
TECHNICALLY SPEAKING Euro has exceeded major resistance at 1.2110/20 and has not been able to get back through this key level.There is more resistance at 1.2190/1.2200 in the near term. The RSI is a positive 63.58 and the Slow Stochastic is waning at mid day.
GAIN AN EDGE We look to buy Euro on a dip to 1.2125/35 with a stop below 1.2100 and a take profit of 1.2195
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