The Yen At A Pullback Juncture
The yen is in day pulling back for a second day off two-month highs but look for the contract to find support at current levels and for its Momentum-5 List impulse to resume. The .8230-40 area is the level where the yen last blew out of a flag and the mid-point of its expansion bar from eight days ago. Traders are selling yen on a report showing a drop in consumer spending and on declining Japanese stocks.
OPEC did what was widely expected by maintaining output quotas at its regularly scheduled meeting. Crude oil is trading within a narrow range. With inventory levels in the US approaching the 5-year moving average, and the recent upward pressure from Iraq’s threat to withhold oil from world markets waning, fundamental traders may begin positioning for a test lower in the energies.
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PowerRating) are higher on new economic data showing manufacturing activity continues to wane. Factory orders fell 3% last month, more than the 2.7% predicted by economists. Lower productivity and the lowest National Association of Purchasing Managers report for non-manufacturing goods also worked to solidify the view that the Fed will have to remain on the offensive to keep a manufacturing recession from turning into a broader economic recession.