Tuesday September 7, 2004 - 18:21:27 GMT
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DOLLAR SLIPS IN MUTED TRADING
We have seen some significant strength in the yen on the back of a 5 week high in the Nikkei 225 Stock average. Traders are anticipating a doubling of Japanís economic-growth estimates for the second quarter in a report that is due out on Friday. USD/JPY was as high as 110.64 before heading south and breaking the 109.80 support area, which then took out a plethora of stops. Currently we are slightly above the lows of 109.23. The yen strength was also evident in the crosses as GBP/JPY was smoked for nearly two big figures and EUR/JPY has also been under selling pressure. In other action to note, we have seen USD/CAD under significant selling pressure as a result of the Canadian PMI, which came in at 64.6 when expectations where only for 54.5. USD/CAD was as high as 1.3014 prior to the data and then quickly came off and traded as low as 1.2854.
There is short term support seen in Dollar/Jpy at 109.10/20 and below that at 108.80/90. There is resistance seen at 110.00/10 on the other hand. On a daily chart 108.50/60 is a key support level.
GAIN AN EDGE
We look to sell Dollar/Jpy at 109.75/85 with a stop above 110.20 and a take profit of 108.95/05
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