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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 Recoups Losses, But= Gains Limited on Market Holiday January 21, 2:00 AM: EUR/$..0.8834 $/JPY..= 132.64 GBP/$..1.4354 $/CHF..1.6619 USD Recoups Losses, But Gains Limited o= n Market Holiday by Jes Black US Financial Markets closed for Market Holid= ay. The dollar recouped the majority of its losses against the majors in l= ight trade on Monday after profit taking trading pushed the dollar to a one= -week low of 88.66 cents against the euro and a 4-day low of 132.05 yen. Bu= t currency movements stabilized after Tokyo caught up with the dollar sell = off in Friday's US session and traders in London took a breather due to dec= reased volume ahead of the Martin Luther King Jr. holiday in the U.S. The= re was little economic data from Europe today to move the markets. But the = euro area's industrial production figures for November showed a larger than= expected decline to -4.3% from -2.7% in October, the biggest y/y drop sinc= e July 93. It was the third consecutive decline and raises the question of = whether the European Central Bank will lower rates oat its next meeting on = February 7 given that inflation is now at their 2% target rate. Markets wi= ll also ponder the direction of US rates this week as Fed Chairman Greenspa= n is scheduled to speak before the Senate Budget Committee on Thursday. The= much-publicized columnist, John Berry, wrote in Saturday's edition of the = Washington Post that Greenspan "sounded more pessimistic than intended abou= t the prospects for U.S. economic recovery, according to several Fed source= s." Therefore, markets are now pricing in less than a 30% chance of a rate = cut at the Jan 30 meeting, leaving the majority to believe rates will hold = steady at 1.75%, a 40-year low. The dollar appreciated over 6% last year vs= the euro and economists are now divided over whether a further rate cut wo= uld help the dollar. EUR/USD rose to a 1-week high of 88.66 in Tokyo trad= e, after breaking through resistance around 88.50. The high also marked the= 200-day moving average and was not broken after plunging below that level = following last Tuesday's 2-cent drop. The single currency then eased slight= ly in London trade to support at 88.36. The real test will be on Tuesday to= see if it can add to Friday's gains after falling 2% vs USD and JPY last w= eek. The EU's statement on Friday that Eurozone GDP for 2001 could have fal= len to a level between -0.3% and 0.1% is likely to keep pressure on the eur= o and only a break back above 89.50 is seen improving the chances of the si= ngle currency after it hit a 3-week low of 87.91 last Thursday. Key support= is seen at 87.50, which marks the 31.8% Fibonacci retracement of the move = from 82.25 to 95.96. Resistance is seen at 88.50 followed by 89.10, which m= arks the 50% Fibonacci retracement of the same move. Yet, only a move back = above 89.50 would give any hope of a near term recovery as temporary moves = higher are not seen by the market as indicating strength given the euro's d= ifficulty to remain above 90-cents. USD rose to a day's high of 132.66 yen= after profit taking on Friday's US session and Monday's Tokyo eroded after= the dollar held above 132.00 support. USD is still off of Friday's 1-week = high of 133.03 but profit taking from recent gains has not changed sentimen= t over a weaker yen. USD/JPY support is seen at 132.0, 131.80 and 131.60. R= esistance is eyed at 133.0 and 133.35. In Japan, the BoJ published the min= utes of their November 29 meeting, showing members voted 8-1 to ease moneta= ry policy. Moreover, a Japan MoF official urged debate on BoJ buying of for= eign bonds as a way to weaken the yen. Given BoJ Governor Hayami's increasi= ng concern with deflation, it is likely that the central bank will in the n= ear future futher increase the money supply in some fashion, which would we= aken the yen. Meanwhile, U.S. Treasury Secretary Paul O'Neill's remarked = on Monday that he was not planning to discuss foreign exchange at his sched= uled meetings with Japanese PM Koizumi and Financial Services Minister Yana= gisawa later in the day. The yen's sharp fall in recent months has drawn in= creasing attention after last week's rumblings in SE Asia and China over a = weak yen and Friday's complaints by the National Association of Manufacture= rs over a strong dollar making it difficult to compete with cheaper-priced = Japanese goods. But O'Neill and the administration seem ready to tolerate a= weaker yen if it means Japan has banks dump bad loans, accelerate reform a= nd deregulate markets, like the US did. GBP/USD pared earlier gains after = hitting a high of 1.4418 in Tokyo and fell to a low of 1.4353 in London tra= de. Support at 1.4330 is seen as critical. It marks the 50% Fibonacci retra= cement of the move from 1.4060 to 1.4606. A break of that level would call = upon 1.43 on its way to 1.4267, the 61.8% retracement of the same move. Res= istance is seen at 1.4440, 1.4480, 1.450 and 1.4550. Key support is at 1.43= 30. Today's data from the UK showed UK public sector net cash requirement = (PSNCR) jumped to 9.44 billion pounds in December from 5.4 the previous mon= th. The figure was the biggest monthly shortfall since March 96. This does = not mean public finances are in bad shape because Tres Sec Gordon Brown has= accumulated surpluses in the past year. Moreover, public sector net debt o= utstanding was just 318 pounds, or 31.6% of GDP, which is very low figure c= ompared to most other industrialized countries. USD/CHF rose to a high of= 1.6633 after it held above support at 1.6580 following a 1-1/4 centimes lo= ss on Friday in the wake of EUR/USD gains. Technical weakness was also appa= rent after two attempts to break back through resistance at 1.6725 were thw= arted. Support stands at 1.6590, 1.6550 and 1.6520. Upside capped at 1.6725= , 1.68 and 1.69. =09[IMAGE] Audio Mkt. Analysis Dollar Fails to Rise on= Strong U.Michigan Articles & Ideas Philly Fed-Supported Optimism = EUR/USD: Technical Analysis Articles & Ideas Forex Glossary Econom= ic 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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