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[IMAGE] Forums Discuss these points in the Forums: Forexnews Forum T= echnicals Live Charts Analysis available from: Cornelius Luca J.P. Chorek= Technical Research Ltd. Charts & News featuring Standard & Poor's = Interest Rates US: Japan: Eurozone: UK: Switzerland: 1.75% 0.15% 3.= 25% 4.0% 1.25-2.25% [IMAGE] =09 [IMAGE] USD Flexes Muscle But E= arnings and Data Dominate January 16, 7:00 AM: EUR/$..0.8814 $/JPY..131.37 = GBP/$..1.4355 $/CHF..1.6681 USD Flexes Muscle But Earnings and Data Domina= te by Jes Black At 8:30:00 AM US Dec CPI m/m (exp 0%, prev 0.%) US Dec CPI= y/y (exp 1.6%, prev 1.9%) US Dec CPI m/m ex food/energy (exp 0.2%, prev 0.= 4%) US Dec Real Earnings (exp n/f, prev 0.8%) At 9:15:00 AM US Dec Capacity= Util (exp 74.6%, prev 74.7%) US Dec Ind prod (exp 0.0%, prev -0.3%) At 9:3= 0:00 AM US Nov Business Inv. (exp -0.5%, prev -1.4%) At 2:00:00 PM US Fed B= eige Book (exp n/f, prev n/a) The dollar added to gains in European trade = as the euro fell to fresh lows against the dollar, yen and pound. Weighing = on the single currency was sharp losses in the euro/yen to a fresh 3-week l= ow of 115.67 since hitting a 2-year high of 119.71 on January 2. This spill= ed over into EUR/USD losses as key stops were triggered on its way to a fre= sh 3-week low of 88.04. The single currency was also down against the Swiss= franc after dropping sharply in after-hours US trade on Tuesday, giving wa= y to speculation the euro fell victim to Spanish banking losses in Argentin= a. Despite dollar gains and euro losses, markets will remained focused on = today's data and earnings announcement for further direction. Tuesday marke= d the start of earnings season and even though most companies beat poor Q4 = expectations, the markets responded more to the general outlook and pushed = shares up only slightly. Therefore, data will dictate as well this week. Ec= onomists forecast more improvements, and therefore, the dollar is likely to= find support as long as the data meets or exceeds expectations. Today's d= ata includes business inventories, industrial production figures, the Beige= book and CPI. Business inventories are expected to continue to decline in = November, adding to the inventory correction which will be positive for the= economy and the market. Industrial production is expected to be flat in De= cember after the improvement in manufacturing PMI. This comes after four co= nsecutive declines. The CPI report for December is expected to show that in= flation trends are still tame, with a rise of 0.1% m/m. Markets will also l= ook to the Fed's Beige book for their assessment of the current climate. T= he key earnings announcements for today include General Motors at 8:00 AM, = followed by Continental Airlines. It will also be a big day for tech stocks= with Yahoo!, Advanced Micro Devices, Apple Computer, Compaq Computer, and = Macromedia all reporting after the bell. EUR/USD fell to a fresh 20-day lo= w of 88.04 after falling below the key 89.10 level, which marks the 50% Fib= onacci retracement of the move from 82.25 to 95.96. This level is significa= nt in that it reflects equilibrium in supply and demand conditions between = euro and dollar, indicating investors are unsure as to the future direction= the pair will take. Moves higher are not seen by the market as indicating = strength given the euro's difficulty to remain above 90-cents. Moreover, = yesterday's close below 88.60 is a bearish sign for the euro and an inabili= ty to regain that level will likely call upon further losses. But moves in = the JPY will be important to watch as most of EUR/USD losses come on the ba= ck of a steep fall in EUR/JPY to a low of 115.67 from a high of 119.37 last= week, or a 3% drop. That's double the losses incurred by USD/JPY. In the m= eantime, EUR/USD would have to break back above 89.50 for any hope of a nea= r term recovery. GBP/USD fell to a fresh one-week low of 1.4357, down from= Monday's 2-week high of 1.4513 as losses vs JPY and losses in EUR/USD weig= hed on sterling as well. However, GBP was supported by weekend comments fro= m PM Blair concerning EMU entry. Blair's comments have allowed GBP to keep = EUR under pressure around 61.23 pence after falling as far as 62.80 at the = start of the year. However, failure for GBP to maintain above 1.4440 will b= ode poorly for cable. Support is seen at 1.4360 and 1.4340 and 1.4320. Resi= stance is seen at 1.4390, 1.4440, 1.4480, 1.450 and 1.4550. Meanwhile, JPY= was little changed after the Bank of Japan Policy Board kept monetary poli= cy unchanged with a current account deposit target at 10-15 trln yen. Howev= er, the central bank also decided to expand the range of eligible collatera= l for its money market operations as a new way of supplying funds to the mo= ney market. The BoJ was not expected to do something unorthodox which would= give the impression that they were deliberately weakening the yen. Therefo= re, the buying foreign assets may not be an option if the market continues = to push JPY lower. USD/JPY rose to a day's high of 131.65, up from overnig= ht lows around 130.80 after that support level held. Corrective yen buying = was anticipated given the highly oversold position of the yen in recent wee= ks as it fell 10 points in 6 weeks to a 3-year low of 133.37 against the do= llar. Any correction in USD/JPY will have to hold above 130.40 to maintain = its bullish trend, dealers say. EUR/JPY was not as lucky, only rising to a= day's high of 116.24 before paring gains to a new 3-week low of 115.67. EU= R/JPY losses were more pronounced as it broke out of its steep 2-month up t= rend from around 106 to a 2-year high of 119.71 on January 2. Since the eur= o's climb was steeper than that of the dollar against the yen, it was more = vulnerable to a deeper retracement than USD/JPY. That was the case after EU= R/JPY broke below support at 116.50. Resistance is now seen at 116.50 follo= wed by 117.00 and key resistance at 117.50. A close above 116.50 will be ne= eded in order to maintain its bullish momentum, dealers say. Key support is= seen at 115.60. Helping JPY was a declaration from Finance Minister Shiok= awa that Japan was not intentionally guiding the yen lower and that that re= gional concerns about the weaker yen were a misunderstanding. But the impac= t was muted, as Japan's government maintained its bleak view on the economy= the December monthly report, citing record-high unemployment and increasin= gly frequent bankruptcies. JPY was also weighed by Japan's Econ Min Takenak= a who said the movements in FX markets have not been extreme. In other new= s, Argentina's central bank intervened in the floating peso market overnigh= t to prop up the currency when it weakened to near 2.0 pesos/dollar. = =09[IMAGE] Audio Mkt. Analysis European FX Make Late Slide Articles = & Ideas Greenspan Widens Door for One More, But... A Weak Yen Is the Sol= ution for Now Articles & Ideas Forex Glossary Economic Indicators = Forex Guides Link Library [IMAGE] =09 =09=09[IMAGE][IMAGE] [IMAGE][IMAGE]=09 =09=09 This e-mail is never sent unsolicited. If you wish to unsubscribe fr= om this or any other Forexnews.com newsletters, please click here . Any op= inions expressed by representatives of Forexnews.com or its affiliates as t= o the commentary, market information, and future direction of prices of spe= cific currencies reflect the views of the individual analyst, and do not ne= cessarily represent the views of Forexnews.com or its affiliates in any way= . In no event shall Forexnews.com or its affiliates have any liability for = any losses incurred in connection with any decision made, action or inactio= n taken by any party in reliance upon the information provided in this mate= rial; or in any delays, inaccuracies, errors in, or omissions of informatio= n. =09
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