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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 Steady Ahead of Data B= arage and Bush January 29, 7:00 AM: EUR/$..0.8609 $/JPY..133.35 GBP/$..1.4= 118 $/CHF..1.7089 USD Steady Ahead of Data Barage and Bush by Jes Black A= t 8:30:00 AM US Dec Durable Goods (exp 0.9%, prev -4.8%) US Dec Ex defence = (exp 1.5%, prev 2.4%) At 9:40:00 AM US Redbook (exp n/f, prev 1.4%) At 10:0= 0:00 AM US Jan Consumer Confidence (exp 95.4, prev 93.7) At 9:00 PM Preside= nt Bush State of Union Address The dollar took a breather today before a = multitude of economic data get underway and the market braces for the State= of the Union address by President Bush. The sharp rise in the dollar again= st the European majors over the past few trading sessions is based on the b= elief that this week's US data will show continued improvement. Moreover, P= resident Bush's speech is expected to reflect a bullish outlook on the US e= conomy. This has kept the dollar index hovering near the 120 level today, j= ust shy of its 15-year highs around 121.00. EUR/USD fell to a day's low of= 85.93 in European trade following a failed attempt to break key resistance= at 86.35. The single currency now looks vulnerable to fall back below 86.0= 0 on its way to yesterday's 6-month low of 85.72. A break below this would = then target 85.55, the 71.8% Fibonacci retracement of the move from 82.25 t= o 95.95. However, choppy trade over the next few days is likely and the mar= ket does not see temporary moves higher as indicating strength. Resistance = is viewed at 86.35, 86.50, and the key 87.40/50 level which marks the 61.8%= Fibonacci retracement of the same move. In a newspaper interview publishe= d Tuesday, the ECB's Issing said most studies indicate that the euro is und= ervalued. However, Issing conceded that the central bank may have underesti= mated the impact of the US slowdown on the Eurozone economy. In the near te= rm, Q1-Q2 2002 growth is likely to be flat growth and that the euro FX rate= will be dependent on progress with EU reforms, which have been slow to mak= e much headway, Issing said. But holding back the dollar for the moment is= the fact that much hope has again been pinned on hopes of a speedy US reco= very. Therefore, not only will this week's economic data have to impress, b= ut all eyes will be on the Fed's FOMC meeting which convenes on Wednesday. = A strong majority expects the Fed to stay put on rates. But the focus will = be on their outlook for the economy and whether they change the easing bias= to neutral after an incredible 11 interest rate cuts last year to a 40-yea= r low of 1.75%. Another point of contention this week will be whether the= G7 meeting in Toronto and the World Economic Forum in New York become a so= unding board for big global interests to bash the recent resurgence in the = dollar. Manufacturers are likely to complain that the state of the economy = is now about at the same level just prior to the September 11 attacks, but = the USD index is again trading near 15-year highs. In fact, recent dollar = strength gave way to corrective yen buying on Monday as USD/JPY fell 1.5% f= rom its recent 40-month highs around 134.90. The euro and pound crosses far= ed worse and have fallen 3.75% and 2.5% respectively, since peaking at 2-ye= ar highs last Thursday. BoJ Governor Hayami helped push the yen higher fo= llowing a break in the usual weak yen rhetoric by MoF officials. Hayami rei= terated his opposition to a weaker yen, arguing that a softer currency is n= ot a solution to Japan's problems and that manipulating the yen lower would= undermine Japan's credibility. However, Hayami's comments are not seen as = carrying that much weight because it is widely known that the MoF conducts = FX policy, not the BoJ. Nevertheless, given the rapid fall in JPY over the= past 2 months and the subsequent consolidation, some dealers warn of furth= er corrective buying in the yen before a renewed fall will push JPY below r= ecent lows. Some dealers expect a reversal in USD/JPY back as far as the 13= 0 mark. But before that happens, current support at 132.80 and 132.40 will = have to give. Meanwhile, the upside is capped at 134.00, 134.50, and 134.90= . Despite any technical correction in the JPY bear trend, the currency is = more likely to succumb to its weak economic fundamentals. Today, Japan's un= employment rate climbed to a record high for the fourth straight month in D= ecember to 5.6%, up from 5.5%. It was the highest rate since unemployment r= ecords began in 1953. Separate data showed average spending down 4.4% in De= cember from a year earlier. Moreover, GDP is expected to contract by 1% in = this fiscal year (ending in March) and the government has forecast 0% growt= h for FY2002. GBP broke out of today's tight trading range and fell to new= day lows against the dollar and yen. GBP/JPY is now testing support around= one-month lows of 187.00. Sterling has now dropped over 2.5% against the y= en since last Thursday's 2-year highs around 192.20. GBP/USD also fell to a= day's low of 1.4045, just above overnight 6-month lows of 1.4043. Support = is seen here, followed by 1.3980 and 1.3930. Finally, today's key data is = the Conference Board's Consumer Confidence survey which is expected to rise= to 95.4, from 93.7 in Decmeber. However, because it is scheduled one day b= efore the FOMC decision on interest rates, the markets reaction is likely t= o be muted. Durable goods orders are also expected to rise by 0.9% in Decem= ber after falling 4.8% previously. But inventory depletion is unlikely to l= ead to a sharp recovery.rd high for the fourth straight month in December t= o 5.6%, up from 5.5%. It was the highest rate since unemployment records be= gan in 1953. Separate data showed average spending down 4.4% in December fr= om a year earlier. Moreover, GDP is expected to contract by 1% in this fisc= al year (ending in March) and the government has forecast 0% growth for FY2= 002. On Monday, the Japanese government said that consumer sentiment remai= ned weak in December amid rising corporate bankruptcies and record high une= mployment. Deflationary pressure also persists as retail sales in Japan fel= l 5.7% from a year earlier in December for the ninth straight month of decl= ine, showing how falling incomes and are weighing on spending as consumers = become more uncertain about the economic outlook. JPY is also likely to re= main under pressure in the near term as ratings downgrades and rising bond = yields steer investors away from Japanese assets. The Bank of International= Settlements said Monday the outstanding balance of overseas loans and inve= stment by Japanese banks was up some $40 billion from the end of June. More= over, banks are unloading Japanese bonds in order to book profits before th= e fiscal year ends on March 31. Foreign investors have also sold bonds as t= he falling yen has created a currency risk too great for the scant return o= f Japanese bonds. USD/CHF also remained above support at 1.7020 which is k= ey for further gains. Follow up support stands at 1.6945, which marks the 5= 0% Fibonacci retracement of the same move. On Monday, Swissy rose above res= istance at 1.7075 to a new 5-month high of 1.7173. Swissy is now seen targe= ting 1.7245, which marks the 61.8% Fibonacci retracement of last year's Jul= y high of 1.8221 to the September low of 1.5670. =09[IMAGE] Audio Mkt. Ana= lysis USD Retreats Ahead of Data Flood Articles & Ideas How Will the= Dollar Fare Amid the Data Barrage? ECB: One More Cut Articles & Id= eas 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 f= rom this or any other Forexnews.com newsletters, please click here . Any = opinions expressed by representatives of Forexnews.com or its affiliates as= to the commentary, market information, and future direction of prices of s= pecific currencies reflect the views of the individual analyst, and do not = necessarily represent the views of Forexnews.com or its affiliates in any w= ay. In no event shall Forexnews.com or its affiliates have any liability fo= r any losses incurred in connection with any decision made, action or inact= ion taken by any party in reliance upon the information provided in this ma= terial; or in any delays, inaccuracies, errors in, or omissions of informat= ion. =09
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