Disappointing Retail Sales Help Euro Rebound Against the US Dollar
Fri, Sep 12 2008, 16:58 GMT
by Andrei Pehar
Retail sales dropped by 0.3%, the second straight month of declines in a row, confirming that the consumer is feeling the pinch of the tighter economy. Excluding autos, the drop was closer to 0.7%
This comes against news of Lehman Brothers being put up for sale (with Bank of America and HSBC among the list of potentially interested parties), and further sights of trouble at Washington Mutual - so soon on the heels of the bailout of Freddie Mac and Fannie Mae.
The combination put a stop to the US Dollar rally of past weeks, and caused the Euro to regain some ground. The current move up in the EUR/USD is expected to cap at somewhere 1.4222 to 1.4227 at close of trading today, eventually perhaps going to 1.4351
If 1.4351 fails to hold as resistance next week, the next likely upside target would be 1.4986. If the US Dollar finds its footing and the EUR/USD resumes its downward progression, breaking below support at 1.3837, then 1.3323 becomes a likely target.
