Thursday August 26, 2004 - 18:04:37 GMT
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DATA DRIVE THE GREENBACK
Before N.Y arrived the German August IFO Business Climate came in firmer than what the market was anticipating, falling to 95.3 from 95.6 in July. The Current Assessment index rose to 94.7 from 94.1, but the Expectations index fell to 96.0 from 97.1 amid record highs in oil prices. IFO President Sinn was quoted as saying the results still don't speak for a strong and vigorous economic upswing. The Euro rallied briefly and then sold of toward 1.2050/55 before turning around and moving higher on the back of a semi poor U.S Initial Claims number. U.S. Initial Claims rose 10k to 343k for the week (331k previously). It was suspected that this number was affected by the aftershocks of Hurricane Charley and indeed the BLS reported Charley was responsible for about half of the increase. Euro charged north and put in a top around 1.2120 before retreating again and moving down to 1.2060/65. The Dollar against the JPY suffered for most of the day while it traded from overnight highs of 110.25/30 to session lows of 109.45/50. Tomorrow in the N.Y session brings GDP and University of Michigan at 8:30 and 9:45 EST respectively.
Dollar/Jpy is sitting below all its 30 55 120 hour moving averages on a 60 minute chart. More importantly it sits below the 200 hr moving average at 109.77. The Relative Strength Index is a negative 36.61. We are through key support at 109.80/90 and the next support is seen at 109.20/30 in the near term.
GAIN AN EDGE
We look to sell Dollar/Jpy on a rally to 109.80/90 and 110.5/15 with a stop above 110.50 and a target of 109.30/40
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