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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] JPY Remains Weak, But U= SD Cautious Ahead of Earnings January 23, 7:00 AM: EUR/$..0.8854 $/JPY..134= .00 GBP/$..1.4280 $/CHF..1.6634 JPY Remains Weak, But USD Cautious Ahead o= f Earnings by Jes Black At 8:40:00 AM US Redbook (exp 4.3%, prev 4.3%) Eve= nt: Greenspan speech at 10:00 AM The dollar retested overnight 39-month hi= ghs at 134.48 today amid further comments from US Treasury Secretary O'Neil= l and Japanese officials. The most market moving remark came from Japanese = Finance Minister Shiokawa who said he didn't think the yen was falling too = rapidly. This pushed GBP/JPY to a new 30-month high of 192.20 and EUR/JPY = to a 3-week high of 119.15. But movements were contained by Japanese PM Koi= zumi who said a rapid fall in the yen was unwelcome. Today's comments diff= ered little from overnight remarks which sent the yen tumbling. Moreover, t= he market is most interested in the US administration's stance on a strong = dollar and a tolerance for a weak yen. Therefore, today's remarks were not = seen as stoking the "weak yen" fires. O'Neill has tried to play down the FX= card by saying the US is only likely to support yen weakness if it means J= apan forces banks to dump bad loans, accelerates structural reforms and der= egulates the markets, like the US has done. O'Neill also pointed out on Wed= nesday the need for Japan to open up more markets to foreign competition an= d for monetary policy to respond to the deflationary crises. Shiokawa agree= d with O'Neill's assessment. Interestingly, EUR/JPY didn't get much of a b= oost from Wednesday's Financial Times, in which top financial diplomat Kuro= da wrote the euro is "significantly undervalued," and that the introduction= of euro notes and coins should lead to appreciation of the single currency= . EUR/JPY rose to a 3-week high of 119.15 but failed to even test this mont= h's 2-year high of 119.71. Support is seen at 118.65, 118.30 and 118.00. K= uroda also said Japan, "needs to tackle structural reform in three areas: i= n the banking sector, particularly in the disposal of non-performing loans;= in deregulation, to spur investment in new business; and in fiscal consoli= dation." Moreover, he discounted recent concerns from Asian neighbors, s= aying, "...after the financial crises in the region in 1997-98, most Asian = countries have adopted more flexible exchange rate policies and significant= ly strengthened their foreign reserve positions. Therefore it is highly unl= ikely that the yen's recent depreciation will have a significantly negative= impact on other Asian economies. Neither is it likely to lead to speculati= ve attacks on other Asian currencies." GBP/JPY hit a new 30-month high of = 192.20 on weak yen sentiment and Japanese fund demand for sterling. However= , GBP has had difficulty maintaining above 192 twice this month and it agai= n fell back to a day's low around 191.30. Resistance is seen at 191.50, 191= .70 and 192.20. Follow up support is seen at 191.10 and 190.85. The dollar= also had difficulty holding onto gains and its inability to break overnigh= t highs at 134.48 could mean some profit taking is in store for USD/JPY. Ho= wever, the US administration's tacit approval for a weaker yen will keep pr= essure on JPY in the near term. Support is seen at 133.80, 133.50, 133.20 a= nd 132.90. EUR/USD held above 88.50 in European trade after falling from a= n overnight high of 88.90. Resistance is seen at 89.10-- the 50% Fibonacci = retracement of the move from 82.25 to 95.96. Failure to regain 89.10 would = likely send the pair lower again, testing support at 88.50, then 88.10, 87.= 70 and key support at 87.50-- the 31.8% Fibonacci retracement of the same m= ove. But only if the pair can maintain above 88.50 and challenge 89.80 woul= d it give any hope of a near term recovery as temporary moves higher are no= t seen by the market as indicating strength given the euro's difficulty to = remain above 90-cents. The euro also held onto gains against sterling afte= r reaching a 2-week high of 62.13. Again, sterling came under pressure in t= he aftermath of EMU concerns following Monday night comments from Bank of E= ngland Director for Europe, John Townend, who said the pound was clearly ov= ervalued against the euro and would almost certainly need to weaken if the = UK were to join the EMU. GBP/USD also remained under pressure and revisit= ed overnight 1-week lows around 1.4270. Cable upside is seen capped at 1.43= 30 and 1.4350. Key support is now seen at 1.4270, the 61.8% retracement of = the move from 1.4060 to 1.4606. A move below this level could open the pair= up to larger losses as the pair targeted 1.4207 and ultimately last Novemb= er's lows around 1.4060. The Bank of England kept the door open for furthe= r rates cuts when it was revealed today in the minutes that the MPC voted 9= -0 to keep rates unchanged at 4.0% in January meeting but also said there m= ay be a case for a rate cut if consumption slows before the global economy = recovers. They also said rates would have to rise if consumption fails to s= low fast enough but that the risks are evenly balanced, even if the MPC bel= ieves consumption is unlikely to slow naturally. Markets will also pay att= ention to Thursday's speech by Fed Chairman Greenspan before the Senate Bud= get Committee at 10:00 AM. Market sentiment now believes Greenspan probably= sounded more pessimistic than he intended in his speech on January 11. The= refore, the market is anticipating a more upbeat tone tomorrow about prospe= cts for economic recovery. Interest rate futures are pricing in a 22% chanc= e of a rate cut at the Jan 30 meeting, leaving the majority to believe rate= s will hold steady at 1.75%, a 40-year low. However, since the dollar index= is trading near 6-month highs, most dealers are now divided over whether a= further rate cut would help the dollar. Meanwhile, earnings news will rem= ain the primary focus on Wall Street today, with chain store sales figures = expected to hold at 4.3% in January. Today's companies expected to report = gains are Amgen, Boeing, DuPont, Dynegy, Exxon, Merrill Lynch, Pfizer. The = major companies expected to report a loss are Broadcom, Coca-Cola Enterpris= es and Corning. The markets will have to assess over 500 company earnings r= eports this week, with 2/3 left to report. Wall Street is likely to pay mor= e attention to the forward outlook after already pricing in dismal Q4 figur= es. =09[IMAGE] Audio Mkt. Analysis Dollar Retreats on O'Neill's Balance= d Words Articles & Ideas NAM & the Strong Dollar: Phase II Philly= Fed-Supported Optimism Articles & Ideas Forex Glossary Economic In= dicators 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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