Wednesday December 15, 2004 - 19:17:49 GMT
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TIC DATA EXCELERATES EURO BUYING
October-04 saw a weak net inflow (TIC data) of $48.1bn, down from a revised $67.4bn inflow seen in September. The October reading was the lowest since October 2003 (+28.8bn) and in the context of yesterday's US deficit (-$55.5bn) is a weak reading for the USD. Taking the US buying of foreign equities and foreign buying of US equities, it leaves a net equity outflow of $8.2bn. US investors also bought nearly $3.2bn of foreign bonds. Official buying of US Treasuries was +$9.5bn in October. This is a weak number for the USD and should continue to weigh on USD sentiment going forward. With this said Euro grinded higher from yesterday’s close of 1.3295 and rested before the release of the TIC data. It then continued its upward climb and put in a high at N.Y. lunch of 1.3440/45. Dollar/Jpy gave back a good percentage of gains from the close and traded as low as 103.95/104.05. The leader of the recent moves has been Eur/Jpy and this pair fell off its highs of 140.50 yesterday and put in a low overnight of 139.32/37 before gaining back some luster and settling in at 139.85.
TECHNICALLY SPEAKING Euro has surpassed all its 30 120 and 200 hr moving averages on a 60 minute chart. The last major break was 1.3340/50 and then 1.3355/65. There is resistance at 1.3465/75 on the same 60 minute chart.RSI is entering into an overbought scenario with a reading of 73.59.
GAIN AN EDGE We look to sell Euro at 1.3445/60 with a stop above 1.3490 and a take profit of 1.3370.
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