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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] Protectionism Saps Dollar = Strength Despite Invigorating Data March 6, 7:00 AM: EUR/$..0.8703 $/JPY..= 132.15 GBP/$..1.4223 $/CHF..1.6975 Protectionism Saps Dollar Strength Desp= ite Invigorating Data by Jes Black At 10:00:00 AM US Jan Factory Orders (e= xp 1%, prev 1.2%) At 2:00:00 PM US Feb Fed Beige Book (exp n/f, prev n/a) = The dollar fell back below 131.80 yen and ceded the 87-cent mark to the eu= ro today as dollar bulls sat on the sidelines despite upbeat economic data.= USD resilience in the face of Enronitis and shaky stock market valuations = was admirable, but the market has again been pulled down by fears that prot= ectionism will slow the inflow of needed investment capital to the US. Lati= n American learned the hard way that capital import dependant countries can= ill afford protectionist policies. Therefore, uncertainties related to th= e imposition of steel imports are likely to have a dampening effect on the = dollar. Moreover, a protectionist stance only underscores the competitive p= roblem associated with a strong dollar and is likely to make it more diffic= ult for the greenback to find strength from its upbeat data. Nevertheless,= the recent spate of strong economic reports will keep the dollar resilient= . Today's release of the beige book should show further evidence of an impr= ovement in economic conditions. However, like Greenspan's cautiously optimi= stic speech last week, the overall tone of the report will most likely be g= uarded as consumer debt and corporate profitability still present downside = risks. Thursday's speech by Greenspan on monetary policy and Friday's key = US labor market report will also keep dollar bulls anxiously awaiting furth= er signs of recovery which may pull the greenback out of rangebound trading= . But the dollar's recent failure to benefit from strong data and Wall Stre= et's gains has left bulls feeling uncertain. Therefore, currencies continue= to trade familiar ranges with trends hard to find. USD/JPY slipped to a d= ay's low of 131.70 and the renewed break of 131.80 support could lead to a = bearish phase after a month long trading range of 131.80 to 135.20. Given = the abundance of negative news from Japan, a rebound back towards 132.50 ca= nnot be ruled out, but a break of 131.50 would speak against it. Upside cap= ped at 132.50, 133.50 and 133.70, 134.00/10, 134.70/85 and strong resistanc= e at 135.15. Support holds at 132.00, 131.80 and 131.50. Supporting the ye= n were signs that US fund managers would increase their exposure to Japan j= ust as government officials have created an artificial floor under share pr= ices through stricter short selling laws. Combined with repatriation fears,= and the government's resolve to boost Japanese assets ahead of March 31, J= PY is likely to fend off the negative news that comes its way. Case in po= int was today's announcement from Moody's that there was a significantly h= igh probability a current review will lead to a two-notch cut in Japan's r= ating. Moody's put Japan on review in mid-February and at the time warned t= hat a two-notch cut in the present Aaa3 rating was a risk. However, the dec= ision was not imminent Moody's said. Unconfirmed talk that Japan's state pe= nsion fund may be planning to start a huge foreign bond investment plan als= o kept USD/JPY from slipping below the key 131.80 support, but lack of reso= lve on the part of dollar bulls kept the pair weak. However, dealers are li= kely to hold off on further selling and await the market's reaction to Japa= n's Q4 GDP data due Friday which is again expected to be negative. EUR/USD= hovered around the 87-cent mark but did not show a clear trend for traders= . Dealers say only a sustained break above 87.30 or below 86.30 would give = a better direction and until then, many are on the sidelines. Holding above= 87-cents and taking out 87.35 resistance is now critical for the euro. Fai= lure to maintain above 87 cents could initiate a fall back towards last wee= k's 3-week low of 86.25. A move through 86.30/15 would target its 6-month l= ow of 85.63. But technical indicators are mixed and the steel import debate= is likely to intensify, keeping pressure on the dollar. Support is seen at= 86.60, 86.30, 86.15, and 85.60. Resistance is viewed at 87.30, and 87.85. = GBP/USD fell to a day's low of 1.4204 from a high of 1.4246 after a strong= move in EUR/GBP from trendline support at 61.15 to 61.30 kept sterling und= er pressure. On Tuesday, cable fell to a day's low of 1.4204 after twice fa= iling to break strong resistance seen at 1.4240. Resistance is eyed at 1.42= 40, 1.4280 and 1.430. Support holds at 1.4180 and 1.4130. Both the euro a= nd sterling traded steady against the dollar today ahead of their respectiv= e monetary policy meetings on Thursday. Improving economic data and benign = inflationary pressures are seen allowing the ECB and BoE to keep rates unch= anged at 3.25% and 4.0%. In fact, financial markets are already pricing in = a quarter percentage point ECB rate rise by June and BoE Governor George la= st week had to verbally intervene in the interest rate market to convince f= utures traders to lower expectations of rate hikes later this year. The Ger= man DIW institute head also doesn't expect more ECB rate cuts in this cycle= , saying the next move is up instead of down. The euro was little changed = after German data showed industrial orders fell more than expected in Janua= ry, down -2.1% m/m, well below the -1.4% expected following the previous 4.= 2% rise. This brought the yearly orders rate down to -5.8% from -5.4%. Germ= an unemployment on the other hand stabilized at 9.6% in February. Meanwhil= e, USD/CHF is trading at around $1.6970 as markets wait for Thursday's Swis= s Q4 GDP figures for more clues about the Swiss National Bank's next likely= monetary policy decision on March 21, although no rate change is expected.= A Reuters survey projected that Q4 GDP would fall to 0.35% or even as low = as -1.5% from the previous quarter's 0.8%, highlighting the weakness in the= Swiss economy. Support is seen at 1.6900, backed by the 200-day moving ave= rage of 1.6856 and the 1.680-franc figure. Upside capped at 1.7060, 1.710 a= nd 1.7140. =09[IMAGE] Audio Mkt. Analysis Trade Concerns Overwhelm USD, De= spite Data Articles & Ideas Will Dollar be Fuelled against the Euro?= Euro: The Lonely Tender 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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