Archived IMT (2010.01.22)

USD and JPY take a breather in early London trading after an Asian session that was particularly strong for JPY amid the 277-pt decline in the Nikkei-225. Although risk aversion remains in Europe with FTSE -20 pts, Dow futures are +23 pts, therefore theres a sentiment that the latest downleg in equities (and risk appetite) may be diminishing. As a result of this improvement in risk appetite, USD and JPY are pulling back, especially against GBP which is awaiting UK RETAIL SALES DUE at 9:30 GMT. Sales are expected to improve from to +1.1% from -0.3% m/m and +3.0% y/y from 3.10% y/y. This could keep cable supported, with the key resistance standing at 1.6290, trend line resistance from Jan 19. A break above it could take us towards 1.6350 cap depending on the strength of retail sales. EURUSD resistance standing at $1.4230. USD up trend is not over. This is only a consolidation.