Tuesday August 31, 2004 - 19:11:02 GMT
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GREENBACK PLUNGES ON U.S. DATA
The Dollar declined today on the back of terrible data out of the Commerce department. The U.S Chicago PMI slid to 57.3 in August from an expected 61.0 that the market was looking for. Also the release of U.S Consumer Confidence sank to 98.2 in August from an expected 106. Dollar/Jpy hung in there temporarily and then plunged through the 109.50 area where the re were said to be massive stops for longer term players. Dollar/Jpy put in a low of 108.70/80 before propping up above 109.00 just after N.Y lunch. Euro on the other hand had an orderly move up through stops above 1.2140/50 and put in a top just above 1.2190 before running into resistance just below 1.2200. Itís also worth mentioning that U.S light crude oil prices fell sharply as Iraq restored oil exports and traders rushed to take profits on the record highs over the past couple of trading sessions. The rest of the week will bring more U.S data with the Non Farm payrolls the greater concern on Friday that should give the Dollar a direction while summer comes to and end.
Dollar/Jpy has put in a new bottom trading below 108.80. The Relative Strength Index has confirmed a downtrend with a poor reading of 25.79 on a 60 minute chart. Trend line support has been broken at 108.85 and there is more support seen at 108.50/60. The 200 hr moving averaged has also been breached at 109.65 that will be the first technical resistance in the near term.
GAIN AN EDGE
We look to sell a rally in Dollar/JPY at 109.50/60 with a stop above 110.05 and a take profit of 108.65
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