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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 Surges vs Yen, But = Nervous on Wall Street and Data February 21, 7:00 AM: EUR/$..0.8710 $/JPY.= .133.84 GBP/$..1.4255 $/CHF..1.6982 Dollar Surges vs Yen, But Nervous on W= all Street and Data by Jes Black At 8:30:00 AM US Dec Imports (exp 90 bln,= prev 90.2 bln) US Dec Exports (exp 55.5 bln, prev 56.2 bln) US Dec Trade = Balance (exp -28.2 bln, prev -27.8 bln) US Jobless Claims (exp 385k, prev 3= 73k) At 10:00:00 AM US Jan Leading Indicators (exp 0.5%, prev 1.2%) At 12:0= 0:00 PM US Feb Phil. Fed Survey (exp 12.9, prev 14.7) The dollar edged hi= gher against the European majors and surged higher against the yen this mor= ning. However, dealers expressed nervousness about going long the dollar af= ter two tumultuous days on Wall Street that whipsawed the greenback back an= d forth. Wednesday's recovery in US equities helped the dollar regain inves= tor confidence. But key data from the US today could undermine any furthe= r dollar gains. EUR/USD fell to a 2-day low of to 86.84, but failed to ta= rget support at 86.60/50. Dealers warn that action is becoming increasingly= volatile and directionless, but gains and losses are seen tracking Wall St= reet 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 losses are also a temporary phenomenon. But despite En= ronitis gripping the market for over a month now, it remains the main stor= y on the Street. Therefore, EUR/USD could stage another recovery given Ja= pan's economic woes and Wall Street's accounting concerns. While some trade= rs expect a pullback towards 86.50, others see the possibility of a run tow= ards 87.50 88.00, 88.60 and even 88.80. But if the pair was to fail breakin= g the last resistance zone, it could resume its downtrend from there. In = London trade the dollar rose to a day's high of 134.04 yen today while EUR/= USD languished around a low of 116.07 until rebounding to a day's high of 1= 16.74 and carrying EUR/USD back above 87-cents. So, also watch the EUR/JPY = cross for its divergence from USD/JPY (since USD/JPY gains are seen capped = at 135) where a move higher could boost EUR/USD. Weighing on the euro toda= y was a surprise 0.4% fall in French consumer spending in January which sen= t the yearly rate to 1.2% from 3.8% and pushed the euro to a day's low of 8= 6.84. Meanwhile, mixed data from Italy had little effect on the market. Ita= ly'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 p= reliminary 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 af= ter back to back surprise declines in UK retail sales worried dealers. Reta= il sales fell for the second month in January, down 0.3% m/m to bring the y= early 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 sal= es had fallen two consecutive months since 1998. The drop left some wonderi= ng if sales which peaked at 7% annually in November are now going to level = off as the Bank of England had hoped. This would put off future interest ra= te hikes and weigh on the pound. Support stands at 1.4225, 1.420 and 1.4150= . Upside capped at 1.4340, 1.4365 and 1.440. EUR/GBP also rose on sterling= weakness to a day's high of 61.17. But, the EMU debate had little effect o= n sterling today as the market comes to grips with PM Blair's commitment to= a referendum and the Chancellor Brown's skepticism. Meanwhile, USD/JPY s= urged to a 10-day high of 134.25 after a large buy order drove the yen lowe= r across the board. Earlier, USD/JPY had a brief rally to 134.04 after Form= er Japanese Finance Minister Sakakibara, aka Mr. Yen reiterated today his b= elief that the dollar could reach 150-160 yen towards year end. Sakakibara = says Japan is in a state of economic crisis and this could spread to the fi= nancial sector soon. USD/JPY then eased back towards support at 133.40/50. = Resistance is seen at 133.70, 134.00 and 135.00. Support is seen at 133.40,= 133.00, 132.65 and 132.35. Sakakibara's view is widely held by the market= s and reflects a growing unease with Japan's lax position towards reform an= d their inability to come up with a coherent plan that tackles deflation an= d the financial sector. Markets grew weary with Japanese rhetoric on Tuesda= y after listening 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 shying away on the injection of public funds into the troubled = banking sector. Even though the yen fell, the Nikkei jumped 4.7% today on h= opes that corporations would continue to write off bad debt and that the go= vernment would combat deflation. Dealers are likely to remain on the sidel= ine ahead of important economic news from the US later in the day and will = keep eyes glued to Wall Street's performance. Weekly jobless claims due at = 8:30 AM are expected to be unchanged from the previous week at 373,000, whi= le 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 widen to -28.3 billion in December from the = previous deficit of 27.8 billion as sluggish global demand takes its toll o= n US exports. But today's key data is the Philadelphia Fed survey of manuf= acturing activity for February, which is expected to decline to 13.0 from t= he previous 14.7. Yet, improvements in the NAPM component could be a boost.= =09[IMAGE] Audio Mkt. Analysis USD Holds Steady Despite Drop in Stocks = Articles & Ideas Off Goes the Franc, On Comes Jospin JPY: Japan's Re= form 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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