Tuesday September 21, 2004 - 20:14:58 GMT
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Dollar Rolls Over
The greenback took a beating today even before the FOMC announcement to hike rates a quarter. Rumors of Citibank buying a HYPO Bank over night sent the euro to new highs of 1.2280 as it broke major trend line resistance at 1.2180. The Fed then announced its decision to hike rates at 2:15 pm NY time and the euro after a brief dip towards 1.2140, ripped thru the offers at 1.2280 and 1.2300 to make an intraday high of 1.2345. Offers remain in front of 1.2350 for option protection but the euro is looking bid and has kept its upbeat momentum all day. There is rumored talk of more option protection at 1.2400 as well. The same has been said for the dollar as the Fed announced a hike but, also said inflation, jobs and the economy are all moving along rather nicely but modestly. Modest was the key term it seems as the market saw that as not very good and the dollar was pounced on as it continued its sell off to 1.2524 lows. Once again the Fed also said that rates will be hiked in a measured fashion. The cross was strong as both EURGBP and EURJPY reached new highs as eurgbp hit a .6866 high and eurjpy 135.52. The dollar against the yen once again is being manipulated as we saw 110.20 capped by Asian mostly exporter offers and rumors of Kampo again on the bid at 109.60 holding the market in its recent ranges.
Technically Speaking: The euro has been given a huge boost and although there will be offers capping gains on the way up to 1.2400 we should slowly reach them. Looking at a daily chart we see some highs that date back to 1.2460 in mid July. This looks like the only true resistance on the way to 1.2500.
Gain an Edge: We look to buy euro on a dip to 1.2280 with a stop at 1.2235, our objective is 1.2480.
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