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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] Dollar Gives Back Friday's = Gains, But Bull Still Stands November 26, 7:00 AM: EUR/$..0.8817 $/JPY..12= 4.02 GBP/$..1.4177 $/CHF..1.6625 Dollar Gives Back Friday's Gains, But Bul= l Still Stands by Jes Black No Key Data Today The dollar fell further in= European trade, giving back all of last Friday's gains after it soared to = new 15-week highs against the euro and yen at 87.37 cents and 124.48 respec= tively, as well as a new 4-month high against the pound sterling at $1.4042= . EUR/USD regained key support at 87.50 followed by 88.10 and climbed to a = session high of 88.32, stopping just short of last week's highs around 88.3= 5. EUR/USD resistance stands at 88.40 followed by 88.80. GBP/USD also rega= ined support at 1.4120 and rose to a day's high of 1.4203 before meeting to= ugh resistance around the 1.42 figure. However, the correction in USD was = seen as temporary as today's movement came on the back of a large buy order= squeezing dollar shorts in the market. Dealers say there appears to be no = demand to chase squeezes or go short USD at these levels, which should mean= the dollar is likely to remain strong. Therefore, dealers still see a rall= y in EUR/USD towards 88.80 to be sold as the bear trend should resume this = week targeting 87.20 followed by 86.75. After earlier action, the FX mark= et appears to have moved into a steady range ahead of the return of US deal= ers after the long holiday weekend. However there is no major data due toda= y and markets will instead focus on Eurozone and US Q3 GDP figures due on T= hursday and Friday as well as the Morgan Stanley Capital International inde= x changes at the end of the week. US Q3 GDP is expected to contract by 0.8%= while the Eurozone could grow by 0.1%. Important to the markets this week = will be any indications contrary to the prevailing notion of the US economy= recovering in the second half of 2002. This prevailing sentiment has been = key to the recent rally in US equities and the dollar. In addition, the Fe= d's commitment to growth is another reason the dollar has performed so well= despite the near certainty of a recession. It is also explains why the Mor= gan Stanley Capital International index is expected to be reweighed in favo= r of US equities at the end of this month. According to the adjustments MSC= I will make, Japan, France and Germany are likely to see a net outflow of c= apital, while the UK and US will be on the receiving end. Markets will als= o focus on the Federal Reserve's Beige Book on Wednesday because it will gi= ve a good indication for the Fed's next interest rate policy meeting on Dec= ember 11. With parts of the economy showing signs of a turnaround, the prob= ability of further aggressive easing by the Fed has diminished. Markets hav= e priced in only a 30% chance that the Fed will ease by 25 bp next month. L= arge gains in US equities have helped rein in the Fed's accommodating polic= y. The S?500 is up over 15% from its September lows, and as investors show = an increasing appetite for risk, a huge amount of money sitting on the side= lines is waiting to get a better return than in the money market. The US is= likely to remain the preferred destination for international portfolio flo= ws, which should add to the recent momentum in the USD index, which has ris= en by 5.6% to its highest level since late July at 117.78, and is now less = than 3% away from hitting its 15-year high reached in early July. Meanwhil= e, JPY came under fresh pressure following the S&P's announcement that it m= ay downgrade Japan's AA+ sovereign debt rating by two notches. USD/JPY rose= to 124.35 but could not break key technical resistance around 124.45/50. M= arkets were not surprised by the news, which was expected, and sentiment wa= s already bearish after the rating agency Fitch downgraded Japan by one not= ch earlier today. USD/JPY fell below 124 yean to session low of 123.95 afte= r failing to break key technical resistance around 124.45/50. USD/JPY faces= resistance 124.50 followed by the Aug 01 high of 125 and 125.25-30. Suppor= t is now seen at 124.00 followed by 123.50 with follow-up foundation at 122= .75. In other news, BoJ Governor Hayami said foreign bond buying was not a= n urgent issue. This could be seen as yen supportive. However, earlier in t= he day FinMin Shiokawa said he had not heard from the central bank about th= e possibility of the BoJ purchasing foreign bonds as part of its monetary p= olicy operations. Therefore, his comment suggests that the BoJ acknowledges= foreign bond buying is possible which would be yen negative, thus making t= oday's impact on JPY a wash. Recall that JPY came under pressure last week = following an article in the FT citing the US administration's acceptance of= the BoJ buying US T bills. GBP/USD also regained support at 1.4120 and ro= se to a day's high of 1.4203 after plunging to a 4-month low of 1.4042 on F= riday. Sterling stumbled following Prime Minister Blair's speech which show= ed strong enthusiasm for the UK joining European Monetary Union. In the pas= t, any reference has caused a knee jerk reaction. However, given the uncert= ain time frame and the need for the 5 economic criteria suggested by Treasu= ry Minister Gordon Brown to be met, GBP recovered all of its losses. EUR/GB= P also fell to a session low of 62.10. USD/CHF fell to a session low of 1.= 6588 but continues to trade in a comfortable range of 1.65 to 1.67 since su= rging over 5 centimes two week's ago to a high of 1.6753. It will be a key = week ahead for the Switzerland, with Q3 employment data due on Tuesday foll= owed by the October KOF indicator on Friday set to show more weakness in bu= siness activity. Meanwhile, inflation data for November should show a large= decline as oil prices fall worldwide. =09[IMAGE] Audio Mkt. Analysis USD = on a Tear After S?warning, Ifo, Umich Survey Articles & Ideas Sidewa= ys Action, Then Weaker Euro Ahead USD/JPY: The Next Level 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 . =09
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