Monday September 27, 2004 - 18:34:21 GMT
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JPY's Oily Slide
This morning saw the release of the New Home Sales figures for the month of August. The number was slightly better then expected at 1.184 million, expectations were for 1.155 million; however, the revision of last monthís data was slightly worse. The market viewed this as a wash and we saw little reaction to the release. JPY has been the currency to note as the USD took out the 111 figure on the upside and the 6 week low in yen was printed right above the 111.40 level. The yen erosion has been contributed to rising oil prices and its potential impact on Japanís economic recovery. Out of the 3 major economies, Japan is the largest importer of crude on a percentage basis. Japanís economic uncertainty has also been evident in the Nikkei 225 as it declined 1.7% last week and extended its decline today by dropping and additional .3%. This has also contributed to the yen weakness as foreign investors have run for the exits. There was some EUR/ USD weakness in European trading as the as a double intraday bottom was put in at the 1.2250. Throughout the New York Session EUR has been bid as it ran back over the 1.23 figure were it has been meandering about.
Technically Speaking: EUR/USD looks to be bumping up against some short term resistance in the side way range it has been trading in since Friday. In addition, the stochastics on a 60 minute chart are hooking.
Gain an Edge: We look to sell EUR/USD near the 1.23 figure with a stop just above 1.2325. We will take profit near bottom of the short-term channel at 1.2250.
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