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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: 2.0% 0.15% 3.2= 5% 4.0% 1.75-2.75% [IMAGE] =09 [IMAGE] Recent Dollar Gains Give Wa= y To Profit Taking November 20, 7:00 AM: EUR/$..0.8830 $/JPY..122.90 GBP/$= ..1.4181 $/CHF..1.6523 Recent Dollar Gains Give Way To Profit Taking by J= es Black At 8:30:00 AM US Sept Int. trade (balance BOP basis) (exp -15bln,= prev -27.1bln) US Sept Exports (exp 78.3 bln, prev 84.5 bln) US Sept. Impo= rts (exp 93.3 bln, prev 111.6 bln) At 8:40:00 AM US Redbook (exp 1.5%, prev= 1.7%) At 10:00:00 AM US Oct Leading Indicators m/m (exp 0.1%, prev -0.5%) = The dollar's rally stalled on Tuesday at 3-month highs around 123.45 yen a= nd 87.70 cents to the euro following overnight comments from San Francisco = Fed's Parry that a US economic recovery is unlikely until the end of the fi= rst half of 2002. Meanwhile, a confirmation from China that it would increa= se its allocation of euros in its FX reserves was supportive of the single = currency. Some estimated the move may involve as much as 20 billion dollars= , but the combined good news for the single currency and bearish news for t= he dollar still failed to put the pair back above key resistance at 88.40. = USD/CHF also held above an earlier low of 1.6506 as it continued to correct= from last week's dizzying 5.5-centime gain. USD gave way to heavy profit-t= aking as dealers also anticipated a possible decline in US equities on Tues= day following impressive gains overnight. Choppy trade ahead of a shortened= Thanksgiving holiday week should add to volatility, but USD is not expecte= d to lose its bullish trend any time soon. Ahead of the holiday, traders wi= ll look to today's trade data from the US as well as tomorrow's key Ifo sur= vey from Germany. Dealers will watch today's US trade data which is expect= ed to show a narrowing of the deficit to $15 billion from $27.1 billion in = August. Due to the accounting treatment of foreign insurance payments relat= ed to the WTC attacks, the deficit could shrink to around $14-15 billion co= mpared to the $24-25 billion that is expected. The $11 billion in insurance= payments would have a positive impact on nominal GDP for Q3 GDP due on Nov= ember 30 and would give a psychological boost to the market. However, this = is completely offset in the deflator and does not affect real GDP, which is= still expected to fall around 0.9% in Q3. Therefore, since the adjustment = for reinsurance claims in nominal GDP is fully offset by the GDP deflator, = only the decline in exports which does not count the $11 billion in insuran= ce claims will be counted towards real GDP. Trade flows were disrupted foll= owing the 9/11 attacks and reduced both imports and exports, but according = to the commerce department, every $1 billion decrease in the September defi= cit is worth between 0.1 and 0.2 points on the real GDP growth rate. Meanw= hile, the leading indicators index appears to have risen in October by a sl= ight 0.1% after falling 0.5% in September. However, this figure could be di= storted upwards due to an irregularity in delivery times. EUR/USD rose to= a session high of 88.38 in European trade, but after its inability to hold= onto gains above 88.40 last week, the pair is expected to edge back toward= s the 88-cent level. On Monday, the euro reached a 3-month low of 87.67 but= maintained above key resistance around 87.45. Weighing on the single curre= ncy was the Bundesbank's November monthly report which indicated as expecte= d that Q3 growth was flat to negative for the Eurozone's number one economy= . No growth in Q2 (-0.003%) also contributed to a year on year growth rate = of around 0.25%, down from 0.6% reported in Q2, thus showing that German gr= owth rapidly deteriorated towards a technical recession. GBP/USD rose to = a session high of 1.4190 after trade data came in largely as expected with = a September trade deficit of 2.25 billion pounds. Expectations were for a f= all to 2.1 billion after August's 3.3 billion deficit. The fall in the Sept= ember trade deficit was helped by a larger than expected surplus with the U= S. The figure alleviated some concern in the market since last week's comme= nt by Bank of England member King who pointed out that the current account = imbalances might lead to a weaker pound. Nevertheless, cable continues to= suffer from this comment as well as last Wednesday's inflation report by t= he Bank of England, which signaled a shift in market sentiment towards the = pound. The market is now more aware of the weaknesses the UK faces due to t= he internal and external imbalances in the economy. Moreover, the market fe= ars the Bank is more concerned about future inflationary pressures given th= at interest rates are now at a 40-year low. Therefore, with interest rates = likely to be left on hold just as the labor market is showing its first sig= ns of weakness, the pound has slipped from last week's high around 1.46 to = yesterday's 3-1/2 month lows around 1.41. Dealers say cable's break of supp= ort at 1.4195 is bearish, and is now targeting the 1.4000 level. Resistance= now stands at 1.4195 followed by 1.4220. Meanwhile, USD/JPY edged back to= key support around 122.75 after reaching a fresh 3-month high of 123.45 on= Monday. This correction was expected after recent gains, but any selling b= ack towards 122.50 or 122.00 sould not be enough to offset the overall bull= ish trend. Sentiment continues to underpin USD because of the renewed momen= tum in US equities as investors show an increasing appetite for risk. The y= en also came under additional pressure from mounting worries about the Japa= nese banking sector ahead of a slew of earnings reports by major Japanese b= anks later this week. However, it is worth noting that Japanese banking pro= blems can sometimes lead to yen appreciation if those institutions are havi= ng to repatriate foreign funds to cover losses. But, with little room for i= mprovement in the Japanese economy until late next year, most market watche= rs see the yen heading for 125 now that it has successfully breached the 12= 3 mark. Resistance is seen around 123.35/45. But USD/JPY support is expecte= d to hold at 121.40/50, with any pullback towards the latter level seen as = a buying opportunity, dealers said. =09[IMAGE] Audio Mkt. Analysis USD Hit= s Fresh Multi-month highs vs EUR, JPY, GBP Articles & Ideas USD/JPY:= The Next Level OPEC: The beginning of a price war? Articles & Idea= s 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 . =09
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