Tuesday August 3, 2004 - 18:31:38 GMT
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BACK IN FAMILIAR RANGES
Latest reports suggest that much of the intelligence used for Sunday's US terror warnings is up to four years old, according to the New York Times. This suggests that the risk may not be as imminent as initially thought, though the article goes on to say that old information had in the past proved relevant all the same. Oil prices spiked to new highs of 44.20 dollars a barrel and with this the Dollar sagged along with news that U.S Personal Spending declined. This added to the retail sales figures showed that the economy in the U.S. has slowed in June. Dollar/Jpy after fighting off the terror threat since Sunday, has managed to keep its head above water for the time being and remained above the 110.20/30 level that capped this pair going back to mid July. Euro managed to rally against the Dollar posting a high of 1.2074/77 after a try at stops in late London trading at 1.1985/90. Thought here was the market was short Euro trying to push stops for a move toward 1.1930 and got caught holding the bag. Tomorrow brings ISM (service) and Factory Orders.
TECHNICALLY SPEAKING Dollar/Jpy is in a short term downtrend going back to July 29th till today. After making a high of 111.10/15 today, this pair is currently forming a pennant between 110.65/70 and 110.35/40 on a 60 minute chart. The Relative Strength Index has a negative reading of 42.25. There is trend line support at 110.30 and resistance at 111.20/30.
GAIN AN EDGE We look to sell Dollar/Jpy at current levels 110.55 and on a break of 110.25 with a 109.60 take profit and a tight 110.85 stop loss.
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