Archived IMT (2010.12.14)

EURUSD MAKES A CLEAR BREAK above its Nov trendline resistance and its 55-week MA as it hits $1.3470s on a combination of broad EUR buying and deepening USD weakness. Yesterday's warning by Moodys about revising US AAA rating following the latest tax stimulus acted as a catalyst to broad USD selling. Todays FOMC announcement may be quite uneventful in that it will confirm the Feds $600 bln purchase program but may be sufficiently eventful in adding to USD weakness. US NOV RETAIL SALES could weel add to USD weakness if they come in lower than 0.7%. Watch Sales ex-food ex gasoline for the more durable market impact. UK inflation rose to a 6-month high of 3.3% but unable to stage any decent gains even against the deteriorating USD. GBPUSD edging over its 55-day MA of $1.5875, coinciding with the 50% retracement of its $1.6296-$1.5490 decline at $1.5895. EURGBP seen capped at 0.85. WATCH Ashraf today on CNBC-Europe at 11:05 GMT