Tuesday July 27, 2004 - 18:40:34 GMT
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DOLLAR EXPLODES ON U.S. DATA
Overnight the Munich-based IFO institute said its confidence index, based on a survey of 7,000 executives, rose to 95.6 from the expected 95.0. IFO's sub-indexes measuring executives' assessment of current business conditions and their six-month business expectations also rose. This took Euro up toward 1.2190 before massive take profit orders capped this pair. Then with the release of U.S Consumer Confidence that rose to a two year high of 106.1 the Dollar erupted. This release torched the Euro, Aud and Gbp and boosted the Dollar against all its counterparts. With an improving job market and positive data the Greenback has maintained a positive tone. After trading sideways for the past few weeks traders are optimistic that this could be the movement that sparks some volatility. The Dollar traded to a six week high against the Jpy to put in a high just below 111.20 just after N.Y lunch, off the daily low of 109.60/65.Tomorrow brings Durable Goods at 8:30 eastern time for another look at U.S data.
DollarJpy has soared through key technical resistance at 110.30/50 that couldn’t be violated for weeks. It also pushed through trend line resistance at 110.80. There is a pennant formation on the 60 minute chart starting at 11am through 1pm in the near term. The Relative Strength Index is a very positive 77.66 on this same 60 minute chart.
GAIN AN EDGE
We look to buy Dollar/Jpy at current levels of 111.05/10 with a tight stop of 110.80 and objective of 111.90
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