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September 15, 2010 / Jeb

Bank Of Japan Announcement Spurs Little Interest In U.S. Dollar

Gold broke out of a classic cup and handle pattern yesterday right before the Bank of Japan announcement.  The Yen has significantly strengthened since June as this is extremely difficult for the Japanese export companies.  The economy in Japan is weakening and they are facing their own sovereign debt issues which have not yet surfaced.  However, what is more important is how the markets are reacting.  This reaction in the yen may be short lived.  Although it might be a short term bandaid the intervention efforts may be too little for the global forces of supply and demand.  There is little support for the dollar as evidenced by the U.S. Dollar Chart.

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