GBP/USD rose on short-covering -- falls back to 1.7920; EUR/USD extends losses to at least 1.2200, even 1.2160
Euro/US Dollar
(1.2241) - 13:42 GMT, Sep 13, 2004
EUR/USD - the single currency fell below the 1.2255 support as feared, initiating a short-term downward correction. There is a good chance that the single currency will correct back all the way to 1.2160/40. This is not yet a given, but we do see minimum decline to 1.2200, and if the level isd taken out, then watch the single currency gravitate lower towards the mid-1.2100s. In the near-term, we turn more bullish once the single currency goes above 1.2310 -- which has indeed shaped up to be a firm trendline technical resistance. We reiterate further, that there is no real reason for bulls to celebrate until 1.2500 hypothetical resistance is taken out.
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Recommendations:
Long EUR position from 1.2027 and 1.2078 was closed at 1.2237 stop-loss.
Stand aside.
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British Pound/US Dollar
(1.7986) - 13:43 GMT, Sep 13, 2004
GBP/USD - the currency pair retests the 1.8022 resistance after PPI for August showed that input prices climbed 1.6%(m/m) in August, pushing the annual rate of inflation to 4.8%. With inflation pressures mounting, this may lead the Bank of England to hike interest rates by a further 25 basis points this year. The currency rose on short-covering; but watch 1.7925 support still --- if unable to hold, the currency pair may slide all the way back to 1.7820. The uptrend remains suspect until it takes out 1.8100.
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Raise your trailing stoploss to 1.7910. just below crucial support.
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Recommendations:
Bought GBP at 1.7833. Move stop-loss from 1.7900 to 1.7910. Keep profit target at 1.8250.
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US Dollar/Japanese Yen
(110.04) - 13:43 GMT, Sep 13, 2004
USD/JPY - the currency pair did again bounce back to 110.30 area and may extend gains to 110.60.65. However, the pair should resume the downtrend from there. The next targeted level may be 108.75 base, but any breach of support should bring about 107.00 quickly.
The currency trades in a range, and may rise back towards the top of the range. Tactics: cover short positions and wait for opportunity to enter at higher levels.
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Recommendations:
Short USD position from 109.59 was bought at 109.54.
Stand aside.
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US Dollar/Swiss Franc
(1.2600) - 13:44 GMT, Sep 13, 2004
USD/CHF - no change in the short-term oultlook -- the currency pair found support at 1.2520 and may rise back to 1.2680 - 1.2700 later in the week. But it should reinstate the downtrend thereafter, and may be bound for 1.2380. The downtrend reassert soon -- expect further declines to 1.2200 further out.
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Recommendations:
Short USD position from 1.2751 was closed at 1.2612 stop-loss.
Stand aside.
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US Dollar/Canadian Dollar
(1.2964) - 13:44 GMT, Sep 13, 2004
USD/CAD -- the currency pair is indeed rising -- we scale up the target to 1.3000 - 1.3020. Nonetheless, this rally is countertrend -- the downtrend resumes thereafter, and may lead to the 1.2680 base further out.
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Recommendations:
Sold USD at 1.2906. Keep stop-loss at 1.2985. Keep profit target at 1.2690.
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Australian Dollar/US Dollar
(0.6971) - 13:45 GMT, Sep 13, 2004
AUD/USD - the currency saw resistance at .7000 and may indeed fall back, but probably just to .6940, and not to the .6900 - .6885 support area. A rally toward .7080 is still expected to resume thereafter.
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Protect your longs: raise your trailing stop to .6930.
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Recommendations:
Bought AUD at 0.6909. Move stop-loss from 0.6880 to 0.6930. Keep profit target at 0.7225.