Wednesday September 1, 2004 - 17:48:45 GMT
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GREENBACK HOLDS ITS GROUND
Greenback holds its ground just barely. The all important ISM data came out close to expectations and that was some what good news for the dollar as it squirted from 1.2598 to 1.2655 just after the news. The euro was trading just ahead of the 1.2200 option barrier and was said to have reached 1.2201 tripping some stops before a dash to a 1.2145 low. ISM came in at 59 on an expected number of 60, and construction spending was on the nose at .4% which was expected. What is more important to look at though are the components within the number that has given a clue as to what to expect for the even more important NFP on Friday. All of the components came in worse than expected and this along with the rise in oil prices late in the trading session has led to the euro bouncing off the lows to 1.2186. The dollar has slid back towards just short of its lows at 1.2608. The cross has significantly risen on the back of the higher oil prices from 133.00 to a 133.56 high seen so far, this has dragged the dollar against the yen to higher prices as well to 109.70. There is talk of a major NY bank buying up the cross and along with rumored middle-eastern players buying the euro this can be the theme for the rest of the week leading into Friday s NFP. Stay Tuned??
Technically Speaking: The euro has formed a nice base around the 1.2145 level and since the 1.2201 was printed; the euro could see another test of that option barrier before some profit taking sets in at higher levels around 1.2240.
Gain an Edge: We will buy euro on the dip with a 1.2130 stop and look to sell our position and reverse to a short around the 1.2240 level with a stop at 1.2270.
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