Thursday July 29, 2004 - 19:11:35 GMT
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DOLLAR PAUSES FOR RUMORS
The dollar traded in a frenzied manner after key levels at 1.2000 in EUR/USD and 1.2725 in USD/CHF were falsely shattered. In almost astonishing fashion, EUR/USD raced from 1.1991 to 1.2097 while USD/CHF knifed from 1.2845 to 1.2715. Meanwhile, GBP/USD briefly traded on the1.80 handle (1.8085 the low) before stretching back to 1.8207 as EUR/GBP retreated from its .6650 high to .6625. In addition, USD/JPY squeezed all the way up to 112.49 only to crash back to key old resistance at 111.65. Today’s dollar buying seemed to be mostly generated from rumors that il Quaeda big-wig, Al-Zarquari , was captured. But as soon as the rumor was dispelled, a frenzied dollar sell off ensued. Now, the market must once again pick itself off the mat in preparation for tomorrow’s GDP reading.
We see solid medium term support at 1.1965 in EUR/USD. The topside is heavily congested in the 1.2080-1.21 region and there is trend line resistance at 1.2150.
GAIN AN EDGE
We will buy EUR/USD at 1.1975 with a 1.1950 stop and 1.22 limit.
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