Following a very weak retail sales number today, the USDJPY continued its sell-off posting a new 2-1/2 year low. The close below the November lows further solidifies the current downtrend for this pair, and with very little on the Japanese calendar it would seem unlikely that any correction from this point would have much follow through, unless we were to see some sort of threat of Japanese intervention to thwart the current run away rally.

EURJPY sliced through the160.00 level to post a 3-1/2 month low to break this pair out of a sideways market, to confirm the short-term bear trend and shift the intermediate-term trend on the daily to lower. In keeping with its relationship with U.S. stock indices, the S&Ps closed sharply lower at a 10-month low settlement emphasizing that it has new- found bear status.

EUR had a turn-around Tuesday as it sold off hard during the U.S. session despite weaker U.S. data in the way of retail sales, which likely tells us that there is more interest from professional investors in taking profits on the Euro on approaches to 150.00 than in playing for a push above that level. GBP tried and failed to get off the mat as it maintained its well-defined downtrend. Once again shorts may find some concern in the recent Commitment of Traders report, which shows sizable long positions on behalf of commercial traders.

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