Tuesday September 14, 2004 - 20:08:34 GMT
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DOLLAR SINKS ON MORE BAD DATA
The Retail Sales data for August came in much as expected after all the revisions are taken into consideration. The headline series came in -0.3% while the street was calling of a 0.2% decline. The excluding auto measure rose by the expected 0.2% for the month. The 0.1% upward revision to the July sales pace was fully offset by a comparable downward revision to the June data. The revisions in the core sales number were also offsetting. The real mover was the Current Account deficit widening out to 166.2 bln which was a new record from a revised 147.2 bln and this weighed on the Dollar significantly. Euro bolted from 1.2240 to 1.2280 very quickly and remained bid fro the rest of the morning and put in a high of 1.2293/96 before settling in at 1.2260 at N.Y lunch. Dollar/JPY on the other hand slipped from 109.75/80 to 109.50 as quick and had trouble gaining any ground trading as high as 109.75 before slipping to session lows of 109.35 before propping up to 109.55 at N.Y lunch
TECHNICALLY SPEAKING Dollar/JPY is trading below its 30 120 and 200 hour moving averages on a 60 minute chart. It has also sunk below 109.60 which was key support on the same 60 minute chart. There is short term support seen at 109.15/20 with resistance seen to the topside at 109.90/00 and 110.15/20. The Relative Strength index is a weak 39.65.
GAIN AN EDGE We look to sell Dollar/Jpy at 109.90 with a stop above 110.50 and a take profit of 108.85.
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