Updating time : 05/03/2008 23:43 GMT

greenback moved higher to 104.20 on active cross selling vs yen (improved risk appetite on the back of the initial rise in U.S. stock markets led to carry trade demand) b4 a retreat was seen in N.Y. afternoon (broad-based selling in usd put pressure on the pair).

Although y'day's cross-inspired rise indicates further consolidation abv this wk's low at 102.60 is in store, as price action fm there is viewed as a retrace. of recent decline, 104.50 (61.8% proj. of 102.65-104.20 fm 103.54) wud limit upside (bearish divergences are likely to form on 15-min oscillators) n yield retreat later. Below 103.29 (y'day's low in Asia) wud indicate correction has ended, bring weakness to 102.90/95 but break of good sup at 102.60/65 is needed to extend downtrend to 102.18 (50% proj. of 106.65-102.60 fm 104.20).

In the event dlr continues to be supported by cross selling in yen n breaches 104.50, a stronger correction to 104.95 (prev. sup) cannot be ruled out but 105.42/45 (50% r of 108.23-102.60 n res) shud cap upside...