18 October 2002, 10:17  Forex - Dollar higher late morning Tokyo on Wall St, reduced risk-aversion

The dollar rose in late morning trade after further sharp gains on Wall Street overnight, reducing market risk-aversion and pushing the US unit through key technical barriers against the yen, dealers said. "This time it's the dollar that's bullish on the back of the US stockmarket," said Hideki Naito, managing analyst at MMS, adding that the 125.50 yen level is the next key resistance area for the currency.
"Ahead of 125.50 yen there are further large option barriers. This is strong resistance. If we can breach this, maybe we can see 126.50 or 127.00," Naito said. "The 200-day moving average is 125.68 so the 50-70 level is initial resistance," he added.
The dollar pushed up to the middle of the year's range of 125.50-135.20 yen this morning, reaching 125.38 after breaching options positions at 125.00 yen, but further options-related barriers are keeping upward progress slow. "Every 10 points above 125.00 yen there are a variety of options barriers but mainly of the reverse option-type; just medium-term speculators (who) didn't expect the dollar/yen to rally above 125.00," Naito said.
"They bought call options just above 125 yen and some of these were closed," he said, adding the dollar has also benefited against the euro. "There was no reason to purchase the euro, just negative reasons for the yen and dollar, and on the euro side the economic data is fragile. Overextended positions have been liquidated," he said.//www.ananova.com

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