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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] Dollar Steady But Market S= till Weary About Wall Street February 20, 7:00 AM: EUR/$..0.8748 $/JPY..13= 3.64 GBP/$..1.4309 $/CHF..1.6918 Dollar Steady But Market Still Weary Abou= t Wall Street by Jes Black At 8:30:00 AM US Jan CPI y/y ex food, energy (e= xp 2.7%, prev 2.7%) US Jan CPI m/m (exp 0.2%, prev -0.2%) AM US Jan CPI y/y= (exp 1.4%, prev 1.6%) US Jan CPI m/m ex food, energy (exp 0.2%, prev 0.1%)= US Jan Real Earnings (exp n/f, prev 0.1%) The dollar was little changed t= his morning as dealers felt uneasy about a further retreat on Wall Street a= mid more accounting concerns. EUR/USD bounced between support and resistanc= e at 87.50 and 87.80 and also held onto overnight gains against the yen, wh= ich helped propel the single currency higher on Tuesday. JPY remains weak a= gainst the dollar as well, after the Bush / Koizumi meeting left dealers fe= eling Japan would continue to drag its feet on reforms. Today's data from = Europe had little effect on the FX market as dealers looked ahead to Wall S= treet for direction. Fears a prolonged stock retreat and a liquidity crunch= kept investors away from US assets, which hurts the dollar. Investors also= ignored the good news that housing starts rose at the fastest pace in two = years by climbing 6.3% in January. This is seen as still giving the dollar = underlying strength because of the rising home asset prices are also giving= consumers more confidence. Worries about the US equity market will domin= ate dollar movements as fears that stricter accounting rules might force so= me companies to revise down past earnings, and push up P/E values which are= already high for recovery periods. This could cause more domestic and inte= rnational fund managers to shy away from US equities and depress the dollar= . Earnings news today will focus on Allied Capital and Allied Irish Banks,= and DaimlerChrysler. Meanwhile, German GDP fell 0.25% in the last quarte= r of 2001 the Bundesbank reported today. This put Germany in an official re= cession after Q301 fell by 0.1%. EUR/USD fell to a day's low of 87.47 after= the release, but markets had discounted the news and were instead looking = ahead to signs of a possible recovery in the later half of this year. There= fore, as with previous euro rallies, yesterday's one-cent surge was seen as= more a reflection of dollar and yen weakness than Eurozone strength. Yest= erday's European data had more of an impact after the rise in Eurozone indu= strial production to 0.8% in December from the previous month's -0.8% sugge= sted a turnaround in the sector was immanent. The German economic institute= ZEW also stated that over half of those surveyed anticipate a Germany econ= omic recovery in the next six months, raising the possibility of a rise in = next week's release of the German Ifo business climate index, which would b= e bullish for the euro. EUR/USD gains were again capped near overnight res= istance at 87.80 and yesterday's surge left dealers perplexed over the domi= nant trend in the pair. Most see this as a further correction from its bear= trend since September. But despite falling towards key support at 86.50/60= on Tuesday, the euro rebounded to a high of 87.79 and is favored for the m= oment given Japan's economic woes and Wall Street's accounting concerns. Wh= ile some traders expect a pullback towards 87.00, others see the possibilit= y of a run towards 88.00, 88.60 and 88.80. Sterling fell to day's low agai= nst dollar at $1.4290 following the Bank of England's February 7 Monetary P= olicy Committee meeting minutes. Dealers unwound more of their cable longs = as today's comments corroborated yesterday's remarks from BoE Governor Geor= ge that expectations of a rate hike were overdone. Trade data also showed a= record high deficit of 33.6 billion pounds last year as exports struggled = in world markets. Against the euro, the pound bounced off of support at 61.= 30 pence and rose to a day's high of 61.12 pence. GBP/USD fell to a day's = low of 1.4290, after testing resistance again at yesterday's high of 1.4330= , which also marks its 200-day moving average. Like the euro, sterling rebo= unded against the dollar from an overnight one-week low of 1.4228 but is st= ill below Monday's high of 1.4330 and still yet below key resistance around= 1.4340/50, the 61.8% retracement of the move from 1.4515-1.4040, which is s= till providing tough resistance. Without a break of that level, the pair re= mains heavy, dealers say. Meanwhile, JPY remained weak across the board, t= roubled by investor disappointment that Japan did not present tangible evid= ence that it was proceeding with structural reforms. USD/JPY rose to a da= y's high of 133.77 but maintained below yesterday's one-week high of 134.01= . USD/JPY rose as traders reacted to Japan's inability to tackle key reform= s pledges. Markets grew weary with Japanese rhetoric on Tuesday after liste= ning intently last week to a number of assurances to shore up the financial= system and tackle deflation. The market was also disappointed by Japan's s= hying away on the injection of public funds into the troubled banking secto= r. USD/JPY support is seen at 132.65 and 132.35. Resistance is seen at 133.= 70, 134.00 and 135.00. JPY losses are still seen constrained by repatriati= on flows back to Japan ahead of the March 31 book closing. Precisely becaus= e of troubled banks and indebted companies are forced to shore up their boo= ks ahead of the fiscal year end. Afterwards, the yen is likely to come back= under pressure as Japan begins to tackle deflation and prevent a financial= crisis. But how they plan to do this remains unclear. Today's data from = the US is expected to show a rise in January CPI but nothing that should co= ncern the markets over rate hikes coming soon. More important might be week= ly chain store sales which are expected to rise 2.1% after a brief fall the= week before. This should carry over to the Redbook retail average to show = a 0.9% increase in the first two weeks of February. =09[IMAGE] Audio Mkt.= Analysis Yen Tumble Drives up EUR/USD Articles & Ideas JPY: Japan's= Reform Dilemma GBP: Old Lady Faces Old Problem Articles & Ideas Fo= rex Glossary Economic Indicators Forex Guides Link Library [IMAG= E] =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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