Message-ID: <24522780.1075855402517.JavaMail.evans@thyme> Date: Mon, 31 Dec 2001 04:30:04 -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: @ENRON X-To: Shackleton, Sara X-cc: X-bcc: X-Folder: \Sara_Shackleton_Jan2002\Shackleton, Sara\Inbox 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] USD Falls To Profit Taking= But Remains Strong Into 2002 December 31, 7:00 AM: EUR/$..0.8841 $/JPY..1= 31.34 GBP/$..1.4490 $/CHF..1.6710 USD Falls To Profit Taking But Remains S= trong Into 2002 by Jes Black At 9:00:00 AM US New York NAPM (exp n/f, prev= 246.2) Market participants kept the majors in tight ranges as European tr= ade was little moved by a quiet London session. Eurozone countries were alr= eady on holiday and FX markets had no key economic data to react to today. = Instead, the major topic in Europe is the long awaited introduction of the = euro on January 1. Despite some apprehension about the introduction, EUR/US= D traded slightly higher than Friday's close of 88.40. Meanwhile, dealers a= lso kept a weary eye on the developments of Argentina's financial and now p= olitical crises as well as the stand-off between India and Pakistan over Ka= shmir. US markets will be open today, but dealers say most trading will be= position squaring ahead of the January 1st holiday. Traders are not likely= to react to today's manufacturing data from the New York NAPM, but it will= be watched for signs of improvement, as it will provide insight into Wedne= sday's US NAPM. This is expected to rise to 45.6 in December from 44.5 and = will give markets some indication of whether there's a pickup going on in m= anufacturing, which has been in a slump the longest of all the sectors. T= hen of Friday will be the all-important jobs report. December non-farm payr= olls are expected to decline 131k from the previous decline 331k. This woul= d be a marked improvement and a positive signal for the US economy, since l= ast week's jobless claims undershot estimates for the fourth consecutive ti= me, and marked the seventh time out of the last eight weeks for which it re= mained below the key 400k figure. Recall that jobless claims had surged abo= ve 500k in the aftermath of the September 11 attacks that halted business a= ctivity, and thus the retreat in the jobless claims bodes well for both con= sumer sentiment and the dollar. Despite falling claims, the unemployment ra= te is predicted to rise to 5.8% from 5.7% in November. The yen hovered aro= und 116.00 to the euro and 131.30 to the dollar, slightly higher than last = week's new multi-year lows, but still under strong pressure after the dolla= r hit a three-year peak just above 132 yen last Thursday. JPY has fallen ne= arly 10 percent in the fourth quarter, but has pared some of its recent los= ses as the market took a break ahead of the New Year. Looking ahead, the ra= pid fall in the yen is expected to slow, as the market is now very long on = USD/JPY. However, the currency will continue to be mired by pessimism about= Japan's deflationary spiral, as well as the rise in Japanese unemployment = to a record high of 5.5% in November. Meanwhile, a senior Finance Ministry = official this morning denied a report in the Mainichi Shimbun that the MOF = and BoJ set a target range for the yen's exchange rate between 120 and 140 = yen per dollar. Instead, the official said that decisions to intervene were= determined by the overall movements in the currency markets. EUR/JPY main= tained near a session high of 116.30, just below last week's 2-year high of= 116.48. Strength in the euro against the yen contrasted with profit taking= in USD/JPY and helped the euro against the dollar as it recovered from its= Christmas Eve low of 87.40, on its way to a one-week high of 88.65 in Asia= n trade today. Yet, for EUR/USD to break its medium-term bear trend, it wil= l need to close above resistance at 90.40 to show it can overcome the upper= bound of the descending channel resistance of the fall from its September = high of 93.26. A break under 88.30 would target last week's low of 87.40. T= his would then be followed by 87 cents and key support at 86.50 cents, whic= h rests along the support line of the downward channel extending from 8950 = to 8735. USD was slightly weaker today despite Friday's better-than-expect= ed US consumer confidence, home sales and jobless claims figures. The dolla= r came under pressure from profit-taking and position squaring ahead of the= holiday. Nevertheless, the dollar remains well bid after a recent series o= f better than expected data. This helped rekindle optimism that the US econ= omy was showing signs of recovery and pushed the dollar index to a 5-month = high of 118.12 last week. Therefore, the profit-taking is seen as healthy g= iven that the index rose over 3% from a December 17 low of 114.41. Sterlin= g fell across the board today as it struggled to maintain above the $1.45 a= nd 190 yen marks. GBP also gave back recent gains against the euro as it sh= ed gains from a 5-month high of 60.56 pence against the euro and a new 2-1/= 2 year high of 191.08 reached last week. Profit-taking in the pound outweig= hed a rise in the UK's Gfk Confidence index which climbed to -1 in December= from -3. Consumer spending has been the main driver of the economy this ye= ar as successive rate cuts from the BoE have helped the British manufacturi= ng slump and kept the housing market booming. Nevertheless, after failing = to overcome highs around 1.4550 last week, sterling is also seen pressured = by the dollar. GBP/USD backing is seen at 1.4460, and 1.4420 while the pair= faces pressure at 1.4540--the 61.8% retracement of the 1.4829-1.4064 move.= Following resistance is seen at 1.460 and 1.4640/50, which marks the downw= ard trend line from the June 5 high of 1.5315 thru the Jan 8 high of 1.5103= . Support is seen at 1.4445, the 50% Fibonacci retracement of the same move= . In other news, European Central Bank President Wim Duisenberg said today= that he plans to remain in office at least to the end of 2002 but reiterat= ed his official position that he would retire at some time before the end o= f his term in 2006 due to his age. Duisenberg denied the existence of a dea= l with France for him to leave office early in 2002 despite French Presiden= t Jacques Chirac having before said that under a "gentlemen's agreement" Du= isenberg would make way for a French candidate in 2002. Duisenberg's will t= o stay on as central bank chief is seen as a positive for the euro because = it shows the Bank is not giving into political pressures to appoint a new h= ead. =09[IMAGE] Audio Mkt. Analysis USD Ignores Rise in Consumer Confidenc= e Index Articles & Ideas A Look Back at 2001, Forex Themes for 2002 = 2002: Euro Deja Vu? Articles & Ideas Forex Glossary Economic Indi= cators 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