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Euro Sags in Early NY Trading

Posted:28/11/2008 13:25 by Oliver Scott
EUR-USD losses accelerated in early N.Y. trade, with stop losses triggered below 1.2825 and forcing an extension to 1.2773 lows. This marks a move of almost two big figures since it record its early European peak of 1.2959. The pace of the pullback in EUR-USD was exacerbated by thin trading conditions, while ongoing speculation of month end related dollar buying has seen many euro bulls pull their bids. A leading U.S. house has been very vocal over a potential dollar buy order for today's London fix, with amounts mooted as high as USD 15 bln. Given the market conditions and the difficulty executing trades at the moment it's doubtful whether someone with such a large buy order would be so open. The risk is the market gets caught overstretched in favour of the dollar and prices turn sharply as European trading winds down.  But the technical indicators suggest today's breach of 1.2800 opens up the downside to the 10-day moving average at 1.2745. If this is broken then a full retracement back towards last Friday's 1.2422 lows is on the cards. click here to return to the top of the page
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