Message-ID: <30987363.1075861041063.JavaMail.evans@thyme> Date: Wed, 13 Feb 2002 04:54:43 -0800 (PST) From: info@forexnews.com To: sara.shackleton@enron.com Subject: US Trading Preview Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: quoted-printable X-From: <info@forexnews.com>@ENRON X-To: Shackleton, Sara </O=ENRON/OU=NA/CN=RECIPIENTS/CN=SSHACKL> X-cc: X-bcc: X-Folder: \Sara_Shackleton_Mar2002\Shackleton, Sara\Deleted Items X-Origin: Shackleton-S X-FileName: sshackl (Non-Privileged).pst [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] JPY Gains Ground Despite L= ooming Debt Downgrades February 13, 7:00 AM: EUR/$..0.8740 $/JPY..132.36 G= BP/$..1.4325 $/CHF..1.6903 JPY Gains Ground Despite Looming Debt Downgrade= s by Jes Black At 8:30:00 AM US Jan Retail Sales (exp 0%, prev -0.1%) US J= an Retail Sales Ex autos (exp 0.2%, prev -0.1%) The dollar held steady aga= inst the European majors today as market participants await today's US reta= ils sales report for January. But the dollar gave up more ground against th= e yen as the Japanese continue to repatriate funds ahead of March. Today's = warning by Moody's rating agency that it was prepared to downgrade Japan's = domestic yen rating as early as next month helped solidify fears amongst th= e Japanese. Meanwhile, fading weak yen rhetoric and a stabilizing Nikkei he= lped shore up the sell off of Japanese assets, thereby lending support to t= he yen. Initially, USD/JPY rose to a day's high of 133.37 following the ne= ws that the downgrade would be at least two notches from the current Aa3. H= owever, the yen was able to rise to a day's high of 132.23 after tripping s= top loss orders around USD/JPY support at 132.50. EUR/JPY fell to a low of = 115.73, down from a day's high of 116.80 and well off Tuesday's high of 117= .52. USD/JPY support now seen at 132.20 followed by 131.90 and 131.20. USD= /JPY is likely to trade in a range between 130 to 135 into the month of Mar= ch. Despite the fact that the market is convinced of further yen weakness t= o come this year, JPY remains supported in the short term. JPY losses shoul= d also be contained to 135 against the dollar now that Japanese officials e= ased off their weak yen policy last week. Moreover, USD/JPY came off Monda= y's high of 135 after this weekend's announcement that the government might= inject as much as $US 78 billion into the financial sector. This has halte= d the sell off in Japanese assets by foreign investors we saw last month. T= he Nikkei rose over 4% from last weeks lows. Recent data from the MoF show= s that in January, foreigners' net Japan bond selling rose to Y1.2368 trln = from a mere Y172.22 bln in December. Therefore, this side of the repatriati= on equation has settled down and JPY should remain supported by recent capi= tal flows data for February which showed Japanese investors sold an unusual= ly large 575.6 billion yen ($4.30 billion) in foreign securities last week,= the sixth straight week of net sales. This should keep Japanese repatriati= on fears until the end of March when the fiscal year ends. Meanwhile, the = dollar traded steady against the European majors today as dealers await tod= ay's US retails sales report for January. Declining vehicle sales and low g= as prices will weigh on total January retail sales growth, which is expecte= d at flat to slightly negative. However, excluding auto sales, core retail = sales should show its first a slight rise as consumer confidence remains st= rong. Markets are therefore anxious to know how the consumer reacted in Jan= uary after a strong spending binge in December. A better than expected figu= re would be bullish for the dollar as it would show one cannot underestimat= e the US consumer even in a recession. EUR/USD held near a day's low of = 87.41, which marks key support for the pair. On Tuesday, offers at 88.00/10= kept a cap on EUR/USD again after Monday's wave of stop-loss buying failed= to develop into more sustainable demand for the euro. A break below 87.40 = would target 87.10/00 and a break of that level would be the first strong c= onfirmation of resumption in the euro's bear trend. Yet, even if the euro = holds above 87.40, it still needs to clear 88 cents followed by key resista= nce at 88.75/80 to remove its bearish outlook. That level marks the 61.8% r= etracement of this year's high to low of 90.63 to 85.63. Looking forward, u= nless the single currency can rise above the 88.80-cent level, its momentum= should wane and turn back south again. The euro also added to losses agai= nst the pound as it fell to a new low of 60.99 pence. The euro began to wea= ken against the pound after a test of 61.95 last Friday was rejected. Tuesd= ay's break below 61.55 support triggered stop loss sales on its way to a lo= w of 61.32. Therefore, renewed pressure on the pair could carry it back tow= ards this month's lows around 60.68 pence. This would cause the euro to giv= e up any further gains on the back of a rise in GBP/USD. Sterling rose to = a new 3-week high of 1.4362 following surprisingly upbeat UK jobs data whic= h raised the expectations of the Bank of England raising rates later this y= ear. Official data showed UK unemployment unexpectedly fell back by seasona= lly-adjusted 10,600 in January, instead of rising. Tuesday's jump in inflat= ion data also highlighted buoyant domestic economy and fanned expectations = of higher interest rates, which tend to benefit sterling. However, the po= und gave up some of those gains after the BoE's inflation report cited litt= le risk to rising interest rates as long as the risks to growth remain to t= he downside. The bank said in its inflation report that it sees RPIX to tre= nd near the targeted 2.5% by year end and for GDP to rise to around trend o= f 2.5% as well by end 2002. However, the key risks are the imbalances in th= e UK economy. GBP/USD resistance is seen at 1.4340, which marks the 61.8% r= etracement of the move from 1.4515-1.4040 move. Follow up resistance at 1.4= 410 and 1.4520. Support seen at previous resistance levels of 1.4235 and 1.= 4180. USD/CHF rose to a day's high of 1.6907 but is still struggling to ma= intain above resistance at 1.6880 after a strong rebound from yesterday's l= ow of 1.6779. For the near term USD/CHF needs to maintain above 1.6820 to a= void further fall to the 1.6685 area. This level marks the 61.8% retracemen= t of the 1.6350-1.7229 rally, which should hold dealers say. Resistance is = seen at 1.6880. Today will also be a busy day on Wall Street after the ret= ail sales data with numerous companies reporting Q401 earnings results. Key= companies include Hewlett-Packard, Intuit, and Marriott International. = =09[IMAGE] Audio Mkt. Analysis JPY, GBP rise in quiet session Article= s & Ideas Euro Rally Running Out of Steam The Swiss National Bank and th= e franc 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. 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