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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 Nervous Ahead of Wa= ll Street and Data February 21, 7:00 AM: EUR/$..0.8710 $/JPY..133.84 GBP/$= ..1.4255 $/CHF..1.6982 Dollar Nervous Ahead of Wall Street and Data by Jes= Black At 8:30:00 AM US Dec Imports (exp 90 bln, prev 90.2 bln) US Dec Ex= ports (exp 55.5 bln, prev 56.2 bln) US Dec Trade Balance (exp -28.2 bln, pr= ev -27.8 bln) US Jobless Claims (exp 385k, prev 373k) At 10:00:00 AM US Jan= Leading Indicators (exp 0.5%, prev 1.2%) At 12:00:00 PM US Feb Phil. Fed S= urvey (exp 12.9, prev 14.7) The dollar edged higher against the European = majors and held its gains against the yen this morning. However, dealers ex= pressed nervousness about going long the dollar after two tumultuous days o= n Wall Street that whipsawed the greenback back and forth. Wednesday's reco= very in US equities helped the dollar regain investor confidence. But key= data from the US today could undermine any further dollar gains. EUR/USD= fell to a 2-day low of to 86.84, but failed to target support at 86.60/50.= Dealers warn that action is becoming increasingly volatile and directionle= ss, but gains and losses are seen tracking Wall Street carefully. Therefore= , most dealers see the recent EUR/USD rebound as a further correction from = its bear trend since September. This reflects the view that US equity losse= s are also a temporary phenomenon. But despite Enronitis gripping the mar= ket for over a month now, it remains the main story on the Street. Theref= ore, EUR/USD could stage another recovery given Japan's economic woes and W= all Street's accounting concerns. While some traders expect a pullback towa= rds 86.50, others see the possibility of a run towards 87.50 88.00, 88.60 a= nd even 88.80. But if the pair was to fail breaking the last resistance zon= e, it could resume its downtrend from there. The dollar rose to a day's h= igh of 134.04 yen today while EUR/USD languished around a low of 116.07 unt= il rebounding to a day's high of 116.74 and carrying EUR/USD back above 87-= cents. So, also watch the EUR/JPY cross for its divergence from USD/JPY (si= nce USD/JPY gains are seen capped at 135) where a move higher could boost E= UR/USD. Weighing on the euro today was a surprise 0.4% fall in French cons= umer spending in January which sent the yearly rate to 1.2% from 3.8% and p= ushed the euro to a day's low of 86.84. Meanwhile, mixed data from Italy ha= d little effect on the market. Italy's December industrial sales rose 0.3% = m/m, but fell an unadjusted 6.8% y/y in 2001. Industrial orders also fell 3= .5% y/y. Italian cities reported preliminary consumer price inflation data = for February up 2.5% y/y from 2.4%. Data from the UK also dragged GBP/USD = below yesterday's low of 1.4261 after back to back surprise declines in UK = retail sales worried dealers. Retail sales fell for the second month in Jan= uary, down 0.3% m/m to bring the yearly rate down to 4.2%. GBP/USD fell to= a day's low of 1.4237, just above key support at 1.4235. Dealers realized = this was the first time retail sales had fallen two consecutive months sinc= e 1998. The drop left some wondering if sales which peaked at 7% annually i= n November are now going to level off as the Bank of England had hoped. Thi= s would put off future interest rate hikes and weigh on the pound. Support = stands at 1.4225, 1.420 and 1.4150. Upside capped at 1.4340, 1.4365 and 1.4= 40. EUR/GBP also rose on sterling weakness to a day's high of 61.17. But, = the EMU debate had little effect on sterling today as the market comes to g= rips with PM Blair's commitment to a referendum and the Chancellor Brown's = skepticism. Meanwhile, USD/JPY kept within a133.50 to 134.00 range today = after a brief rally to 134.04 after Former Japanese Finance Minister Sakaki= bara, aka Mr. Yen reiterated today his belief that the dollar could reach 1= 50-160 yen towards year end. Sakakibara says Japan is in a state of economi= c crisis and this could spread to the financial sector soon. USD/JPY then e= ased back towards support at 133.40/50. Resistance is seen at 133.70, 134.0= 0 and 135.00. Support is seen at 133.40, 133.00, 132.65 and 132.35. Sakaki= bara's view is widely held by the markets and reflects a growing unease wit= h Japan's lax position towards reform and their inability to come up with a= coherent plan that tackles deflation and the financial sector. Markets gre= w weary with Japanese rhetoric on Tuesday after listening intently last wee= k to a number of assurances to shore up the financial system and tackle def= lation. The market was also disappointed by Japan's shying away on the inje= ction of public funds into the troubled banking sector. Even though the yen= fell, the Nikkei jumped 4.7% today on hopes that corporations would contin= ue to write off bad debt and that the government would combat deflation. D= ealers are likely to remain on the sideline ahead of important economic new= s from the US later in the day and will keep eyes glued to Wall Street's pe= rformance. Weekly jobless claims due at 8:30 AM are expected to be unchange= d from the previous week at 373,000, while January lead indicators, due at = 10:00 AM, are forecast to rise 0.5% from 1.2% last month. Markets will also= focus on today's US international trade balance, which is expected to wide= n to -28.3 billion in December from the previous deficit of 27.8 billion as= sluggish global demand takes its toll on US exports. But today's key data= is the Philadelphia Fed survey of manufacturing activity for February, whi= ch is expected to decline to 13.0 from the previous 14.7. Yet, improvements= in the NAPM component could be a boost. =09[IMAGE] Audio Mkt. Analysis Eu= ropean FX Pull Back Against USD Articles & Ideas Off Goes the Franc,= On Comes Jospin JPY: Japan's Reform Dilemma 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 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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