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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: 2.5% 0.15% 3.7= 5% 4.5% 1.75-2.75% [IMAGE] =09 [IMAGE] USD Hits New Multi-Week Hig= hs As Recovery Story Continues October 23, 7:00 AM: EUR/$..0.8884 $/JPY..1= 22.67 GBP/$..1.4207 $/CHF..1.6658 USD Hits New Multi-Week Highs As Recover= y Story Continues by Jes Black At 9:00:00 AM US BTM/UBSW sales (exo n/a, p= rev -1.3%) US Redbook (exp 0.7%, prev 0.6%) Event: Chairman Greenspan to sp= eak at 8:00 AM to a meeting of the American Bankers' Association in Washing= ton The dollar added to Monday's gains, reaching fresh multi-week highs ac= ross the board on continued optimism for the US economic future. There is c= onfidence the US economy can recover from this terrible third quarter and t= his is being reflected in US equity market strength and subsequently the do= llar. USD hit six-week highs of 88.72 vs. EUR and 1.6674 against CHF in Eur= opean trade after a sleepy Asian session. The dollar also hit fresh nine-we= ek highs of 1.4201 against sterling and 122.84 yen. Dealers drove the doll= ar higher for both domestic and external reasons. Fueling gains at home is = the fact that of 225 companies in the S?500 reporting Q3 earnings so far, 8= 5% matched or exceeded projected targets. Therefore, investors are looking = ahead to an economic recovery next year and pushing up stocks now. Fears ab= out the war on terrorism and concerns about the current economic environmen= t have been discounted. Case in point: yesterday's surprise announcement of= two deceased postal workers who were exposed to anthrax failed to substant= ially move the dollar lower. For that reason, the risk-aversion problem is = fading for the dollar, and USD has now moved beyond September 11 attack lev= els. In fact, after dealers put fears of war aside they began to reassess r= elative growth rates amongst the majors and found the US economy to have be= tter long-term prospects. USD/JPY advanced above its offshore high of 122.= 60 to a fresh 9-week high of 122.84. Support is seen at 122.60 and the doll= ar's upswing may intensify should it break 122.80, where stop-loss orders a= re rumored to be placed. Major technical resistance is seen around 123.25. = Weighing on the yen was today's economic data from Japan which showed consu= mer confidence fell in September fell to 36.9, down four points from June a= nd the weakest reading since 35.2 in September 1998. Sterling also dipped= below yesterday's nine-week low of 1.4215, to a new low of 1.4208. Dealers= say comments made by Bank of England member Allsopp that he was concerned = by the four-year long overvaluation of sterling pressured the pound. Alls= opp, who is an external member, said a fall in sterling's value of as much = as 10% would be welcome. He also felt UK interest rates should be cut furth= er to tackle a combination of a weakening global economy and a slowdown in = UK consumer demand. Minutes of the MPC's September and October meetings, re= leased last week, showed that when the committee voted 7-2 on September 18 = for a 25 basis point rate cut, Allsopp was one of two members to vote for a= half point cut. Sterling is now hovering below the 50% Fibonacci retrace= ment of this year's uptrend from around 1.37 to 1.48. If sterling's 6-cent = slide in two weeks does not stabilize as investors take profit from the rec= ent sell-off, cable will target 1.4120, the 61.8% Fibonacci retracement of = this year's same uptrend from June. Boding well for the pound is the fact t= hat the Bank of England appears ready to ease monetary policy again in orde= r to bolster economic growth. The decline in September inflation below the = 2.5% target will provide the central bank with leeway to cut interest rates= again by another 25-bp this year and the BoE's willingness to spur growth = (unlike the ECB) will benefit the pound. EUR/USD came under further press= ure on Monday following bearish economic forecasts from Germany's six leadi= ng economic institution as well as uninspiring comments from ECB members ab= out the plunge in growth. This stands in sharp contrast with market percept= ion that aggressive fiscal and monetary policy will pay off for investors w= ho bet on the US recovery. Some investors chose not to wait until Thursday'= s ECB meeting because aside from reassurances that inflation would fall bel= ow the targeted 2.0% level by next year, the ECB appears reluctant to give = another 25 basis point cut this week. This will likely keep pressure on the= euro. However, even if the ECB were to lower rates, the market reaction co= uld be muted because it has already been priced in for some time now. There= fore, the euro again finds itself in a lose/lose situation because the ECB = has failed to promote growth. A break of 88.70 sees EUR/USD targeting 88.25= /50 area followed by 87.25, the 61.8% Fibonacci retracement of this year's = uptrend from 83.45 to 93.35. USD/CHF passed yesterday's 6-week high of 1.6= 640, to reach a fresh high of 1.6680. Gains against the Swiss franc highlig= hted the fact that the risk premium that investors paid to be in the franc = has faded. USD/CHF is now above September 11 attack levels and even though = the dollar has corrected against the European currencies it still has more = room to rise, especially against the Swiss franc, dealers say. Target is th= e 1.6735 area. However, any major negative developments for the US, at home= or abroad, would quickly translate into gains for the franc Meanwhile, am= id a lack of key data, dealers will await any possible direction Greenspan = might give them this week from three scheduled appearances. Greenspan is sc= heduled to speak today at 8:00 AM at a meeting of the American Bankers' Ass= ociation in Washington and has other appearances as well on Wednesday and F= riday via satellite. Dealers will also look to see if Wall Street enjoys = Tuesday as well as it did yesterday in the face of earnings reports for Q3.= So far, of 225 companies in the S?500 reporting Q3 earnings, 85% matched o= r exceeded projected targets. This has fueled gains in the Dow and Nasdaq a= nd today's futures are up 33 and 9 points respectively. Xerox, Daimler Chry= sler, and Exxon are reporting before the market open and only one major com= pany, ATT&T, is reporting after the bell. =09[IMAGE] Audio Mkt. Analysis U= SD Extends Broad Rally to Pre Sep 11 Highs Articles & Ideas EURO: Ge= rman IFO Will Remind ECB to Build Growth Dollar Comeback Stopped by Risk= of Terrorism 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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