Monday May 10, 2004 - 18:46:51 GMT
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Dollar Rally continues
Price Action remains contained in NY session after wild night. The Asian session started the dollar rally and Europe carried over as the dollar gained more ground against the euro. The major mover was USDJPY as we climbed from an open of 112.10 to a NY high of 114.15. The cross has helped make the move possible as we are now trading at 135.20 from 133.40 on the Asian open. The euro has been in a range of 1.1810 to 1.1870 in NY as lack of any follow thru in either direction has made traders life not so easy today if you are caught on the wrong side of a move. With no news coming out until Wednesday in NY we could be caught in some range trading in the mean time. There seems to be bids in the euro in front of 1.1800 and the all important 1.1760 level still looms below. A clean break of 1.1750 could see us trade to much lower levels. The commodity currencies continue to possibly lead us in a direction as the AUDUSD continues to slide along with the price in Gold. Gold which is considered a safe haven for most when the dollar becomes weak, has been getting pounded since last week and today in early morning trading was lower again before a small bounce when it was believed some funds were the buyers at the lows. The price of crude oil also is a shade of the highs as OPEC announced a small increase in the amount it will now allow to be produced, but gas prices continue to rise in the US as the avg. gas price is now almost reaching $2.00. The continued talk of a Fed rate cut now has the market in a frenzy of when the cut will take place will it be June or August and how much will the cut be? The DOW also dropped below 10,000 a psychological barrier to most in the market and as soon as this happened there was some euro buying noted. The DOW still hovers around this level and possibly a drop can lead to more dollar weakness seen.
Technically Speaking: Eur/jpy looks like we have more room to go to the upside and should be supported on any dips to the 134.50 area. The slow stochastic is reading 86.46 and the RSI is 70.75 maybe a bit over bought but with talk of USDJPY possibly going to 117.00 we should see the cross higher as well.
Gain an Edge: We look to buy eur/jpy on any dips to 134.50 and 133.80 with a stop at 133.25, and our objective is for a push to 136.00.
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