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  1. #11
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    quoteespite several attempts higher the dollar finally had to give in
    on Friday. Momentum had clearly been vanishing on the
    stronger dollar. So now here we are at the beginning of the new
    week. Actually, the present level in the dollar index is very
    important, indeed. A definite break below 90.26 (119.70 in the
    EUR/USD) will mean that the stronger for longer USD is going
    to correct before heading higher again. Market participants
    have simply been piling in the same boat with the strong USD,
    whereby it got too heavy and lost steam. All good and well -
    the dollar will prosper again, and a coming correction will do
    nothing but add new and more fuel to the next dollar take-off
    higher. Friday evening I myself did turn the spot as well and
    are now in possession of net sold dollar positions all over the
    place. In EUR/USD I established a new net bought position
    with first target at 121 and stop loss below 118. In USD/JPY the
    first target for my new 50% sold position is coming in at 116.75
    and stop loss is running above 119.50. AUD and NZD as well
    are about to gain a footing against the dollar in the short run.
    Considering the loads of domestic problems haunting both
    commodity currencies I will be happy to see a return to 75 and
    68 for the newly established 100% bought positions. So all in all
    we are once again in a corrective phase on the dollar in general.
    Normally, not a very rewarding phase and certainly a very
    dangerous phase. We need to see a snap follow-through on the
    latest break lower on the dollar. Otherwise market participants
    will soon loose their nerves and return to the dollar-for longerscenario,
    but for now the USD is retreating.

  2. #12
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    quote:Lone Olesen
    With two monetary policy meetings in
    Scandinavia on the agenda this week EUR/SEK
    and EUR/NOK have been lying pretty low.
    Nevertheless we have increased our positon in
    EUR/NOK with target at 800 and s/l at 771.

  3. #13
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    quote:Christina Andersen
    The last few trading days have proven a true rollercoaster ride,
    especially when you look at the Swiss franc. In time of writing
    EUR/CHF is, again, flirting with the level around 155.80. Of
    course the main reason behind the latest rise in volatility in
    CHF is caused on behalf of the general dollar weakening, and
    thereby technical selling in USD/CHF. However, also the Swiss
    National Bank President Roth, along with a better than
    expected KOF - indicator, has helped strengthening the Swiss
    franc. Roth gave a speech late last week regarding economic
    growth and future monetary policy and stated, that the central
    bank is sticking to its forecast regarding growth and inflation.
    Hence, a gradual rate tightening of 25 bp every quarter is
    therefore broadly expected from the SNB. The new and
    surprising aspect of Roth’s speech was, that he explicitly
    mentioned FX moves as a key factor when looking at monetary
    policy going forward. If the Swiss franc continues weakening
    even further, a normalization of rates would be even more
    necessary! Furthermore, Roth is this morning being quoted,
    saying that Swiss growth in 2006 will be significantly above the
    level in 2005. He is thereby adding further fuel to the present
    burning fire, regarding rising market expectation of a 50 bp rate
    hike in June. We still foresee a stronger CHF against the EUR
    and our advice is still, to handle CHF – funding with care. Next
    important level in EUR/CHF is 155.50 – 60, and afterwards 155
    is lurking in the wings. Looking at EUR/CHF in a long term
    perspective, it is important to mention that a move towards 153
    cannot be excluded at all.

  4. #14
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    [quote]quote:

    Lone Olesen
    FX minds are seriously split these hours and days. Is it the real
    thing happening on the dollar right now? By real thing I mean
    anything Plaza Accord-like happening in the fall of 1985.
    Entering the fx-market in 1986 myself, I truly remember the
    days when selling dollars was the only way to go. No wonder I
    became a born dollar bear! I suspect that this time we will end
    up with the real thing again. The arguments are piling up.
    Starting with the latest G7 statement where the G7 members
    chose to focus almost solely on the global imbalances and the
    subsequent need for a weaker dollar primarily against the
    Asian currencies. Next but not least the statement from Mr.
    Bernanke that the imbalance situation could pressure the dollar.
    Mr. Snow's advice to re-read the G7 statement should the
    market participants not understand their message. Statements
    from the US Treasury that fx-pricing best be left to the markets
    and that physical or verbal intervention was to be abandoned
    and pricing left to the market. To me, that all leads to one thing -
    namely a weaker dollar. In the spring of 1985 the dollar started
    sliding, which was further fuelled in the fall when the Plaza
    Accord (edited at the G7 meeting in Paris at the Plaza) was
    sprung upon the market and followed by decisive centralbank
    intervention. Compared to current account deficit at that time
    (3%) today's deficit is monstrous. Add to that the fact that
    Reagan's economic adviser Martin Feldstein (head of NBER
    today) is doing the rounds in the US today, advocating the
    imminent need for a much weaker dollar. The Americans are
    turning tough on the dollar - we better listen and act
    accordingly.

  5. #15
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    check out that new target!!


    quote:Lone Olesen

    Friday tensions on the fx-market rose for real. Not only the
    dollar went into another downward spiral, but the dollar
    troubles did as feared spread as a contagious virus to the EMcomplex.
    Especially the TRY and the ZAR (both known as "bad
    guys" on a current account scale with deficits of 6.3% and 4.6%
    respectively) took a serious beating, as EUR/TRY rose
    dramatically from the 173 level to a temporary top around 185,
    and USD/ZAR took off to the skies. A definite break of 185 in
    EUR/TRY will open up for new unchartered high territories
    above 193, and as USD/ZAR is concerned a break of 640 will
    open up for a revisit with at least 680. What we are witnessing
    now on especially the EM-complex currencies is a return of the
    long gone risk aversion. All of a sudden market participants are
    starting to wonder, if the received risk premiums - if any at all -
    really do compensate them for the extra risks they are holding
    in especially the EM-complex. The funding part of the fx- and
    the EM-currency story in particular is also starting to hurt the
    international investment community badly now. EUR/CHF is
    coming crashing down through very good support areas at both
    155.50 and 155.00 making CHF-funding less attractive due to
    the strengthening CHF. The latest downmove in EUR/CHF has
    in fact opened up for a revisit with 153.50, hence we have
    decided to move our stop loss on our sold EUR/CHF position
    to 155.50. Momentum trading is still the way to go in the
    overall trending fx-market right now. The skyrocketing
    EUR/USD has made me move the take profit area from 126 to
    now 128 for 50% of my position. New target is now 136.70!

  6. #16
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    Jyskebanks comments out 30 mins ago





    The NZD has been under immense pressure lately as the macro economic data from New Zealand has turned weaker. Overnight NZDUSD was hit by weak retail sales data but as the currency cross rate is currently testing the bottom of a falling trend channel a correction higher may be imminent thus we still prefer a neutral stance.

    The CHF is currently balancing on the edge but so far 163.40 on EURCHF has provided a fair amount of resistance. We have chosen to maintain a selling recommendation on EURCHF at this point but if the above mentioned level gives in there could be potential for further CHF weakness in the short term.
    For clarity, nothing I say is advice....

  7. #17
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    interesting report on CB intervention positing the possibility of ECB moving to weaken the Euro......

    http://www.jyskebank.dk/_jb/commonin...dennyesort.pdf
    For clarity, nothing I say is advice....

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