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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 Holds Above Key Levels,= Looks To Wall St For Direction October 26, 7:00 AM: EUR/$..0.89211 $/JPY.= .122.57 GBP/$..1.4307 $/CHF..1.6505 USD Holds Above Key Levels, Looks To W= all St For Direction by Jes Black At 9:45:00 AM US Oct Univ of Michigan Se= ntiment Final (exp 82.7, prev 83.4) At 10:00:00 AM US Sept New Home Sales (= exp 854k, prev 898k) The dollar held onto key levels against the majors an= d steadied in Friday's morning as traders looked ahead to Wall Streets perf= ormance for direction. Both the euro and yen attempted to break through sho= rt-term resistance around 89.40 cents and 122.40 yen but failed. GBP/USD al= so tested overnight highs around 1.4330 following better than expected Q3 G= DP data, but traders weren't prepared to bet against the dollar, yet. Toda= y's final revision in the University of Michigan confidence survey is not e= xpected to have much effect on markets. Forecasts call for a further fall t= o 82.7 from a preliminary 83.4. This would still be above the final Septemb= er reading of 81.8. However, the initial reading was for 83.6. Still, the i= ndex is down about 10 points from 91.5 in August, putting sentiment at its = weakest level since 1993. A lower than forecasted fall would spell trouble = for consumer spending, the lifeblood of the struggling US economy. Today's = Q3 earnings reports, like on Monday, are not seen moving the market conside= rably. Both Dow and Nasdaq futures are in negative territory. On Thursday,= the wild one-cent swing in EUR/USD from 88.80 to 89.80 caused some conster= nation amongst traders who had eagerly shorted the euro following the Europ= ean Central Bank's decision to keep rates unchanged. The euro's recovery fr= om weak US payroll figures and durable goods orders was not to last though.= Wall Street staged a comeback with the Dow climbing 1.25 percent to its st= rongest finish since September 10. US equities rallied because the prevaili= ng sentiment is still for a strong economic recovery next year. Moreover, m= uch of the negative news is already expected and the dollar could therefore= test higher in coming months as long as capital inflows continue. However= , markets may have become overly optimistic about the outlook for the US ec= onomy since most economic indicators are still showing weak economic signal= s. Next week's data from the US is expected to show a preliminary contracti= on in Q3 GDP of 0.9% along with further falls in manufacturing. This is lik= ely to weigh on the dollar, as it would indicate that the economy is one st= ep away from an actual recession, thereby causing the current optimism to f= ade. But, even though the euro area is expected to avoid falling into reces= sion next year, it doesn't necessarily mean the euro will rise. In the ne= ar-term, growth concerns will remain in focus, not interest rates. Traders = rewarded sterling following today's better than expected Q3 GDP data, sendi= ng GBP/USD to a week's high of 1.4337. The economy rose at a 2.2% rate when= expectations were for a 2.0% y/y rise. The strong UK growth was a surprise= , but markets expect the UK to outperform this year. Therefore, even though= growth was above expectations, the Bank of England may choose to lower rat= es anyway because the MPC is more focused on forward-looking data and the s= trength of the world economy. Moreover, this week's business confidence dat= a from UK manufacturers plummeted to its lowest in three years in October, = which prompted the CBI to call for a 50 bp cut from the Bank of England. Ot= her advocates for more rate cuts include certain members of the Bank of Eng= land. MPC officials on the whole remain focused on the external threat to U= K growth. GBP/USD trading above 1.43. Support seen at 1.4250, with resistan= ce at in the 1.4330 area. USD/CHF hovered around support at 1.65 in Europe= an trade. Today, Swiss National Bank Vice-Chairman Gehrig said he was happy= with current levels of exchange rates and that the appreciation seen as a= consequence of generalized risk aversion after September 11 has been corre= cted. But Gehrig did not comment directly on the future direction of Swiss= interest rates, only saying the SNB hoped to steer monetary conditions in = the coming months in a way that would keep the outlook for price stability = intact. On Thursday the government cut its forecast for Swiss growth to 1.6= % in 2001 from 1.8% and to 1.3% in 2002 from its original 2.0%. =09[IMAGE]= Audio Mkt. Analysis USD Retraces Losses on Stock Market Rebound Arti= cles & Ideas Speculative Flows Point to Further Euro Losses ECB KEEPS RA= TES UNCHANGED AT 3.75% Articles & Ideas Forex Glossary Economic Ind= icators 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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