[IMAGE] Forums Discuss these points in the Forums:  Forexnews Forum       Technicals 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] 	 [IMAGE]  JPY Tests USD Bulls, EuroFx Steady After Upbeat Data  March 5, 7:00 AM: EUR/$..0.8675 $/JPY..131.89 GBP/$..1.4203 $/CHF..1.6995  JPY Tests USD Bulls, EuroFx Steady After Upbeat Data by Jes Black  At 8:40:00 AM US Redbook (exp n/f, prev 0.6%) At 9:00:00 AM US BTM/UBSW sales (exp n/f, prev -0.4%) At 10:00:00 AM US Feb ISM non-mfg survey (form. NAPM) (exp 51, prev 49.6)  The yen challenged overnight 2-week highs of 131.80 against the dollar and pushed to a day's high of 114.40 against the euro despite upbeat economic data from the US and Eurozone over the past week. Yen strength is based on hopes and fears and not sound economic fundamentals. But the dollar's recent failure to benefit from strong data and Wall Street's surge has left bulls feeling uncertain. Therefore, currencies continue to trade familiar ranges with trends hard to find.  The European majors gave back some of their overnight gains against the dollar despite positive services PMI data from the Eurozone and UK. E12 services index expanded for the second month in a row rising to 51.5 in February from 51.0. New business also rose to 50.6 from 49.7, indicating the first rise in new business since the summer. The news raises hopes that a Eurozone economic recovery is around the corner. The data showed France and Italy leading the recovery, while the rate of decline eased in Germany.   More importantly, unemployment improved to 8.4% in January despite how weak output has been. Coupled with stronger than expected E12 PMI data and a further gain in consumer confidence the ECB is expected to keeps rates unchanged at 3.25% on Thursday. In fact, financial markets are already pricing in a quarter percentage point ECB rate rise by June. The German DIW institute head also doesn't expect more ECB rate cuts in this cycle, saying the next move is up.  Bank of France head Jean-Claude Trichet reiterated on Tuesday his view that a strong euro was "in the best interests" of the euro zone economy. But traders were hard to convince as they pushed EUR/USD to a day's low of 86.73 after twice failing to maintain above 87 cents. The pair gave up overnight gains and could fall back towards last week's 3-week low of 86.25 if it is unable to break resistance at 87.15. Traders are not encouraged by Eurozone prospects and sentiment is again turning bearish enough to target a move through 86.30/15 on its way to its 6-month low of 85.63. But technical indicators are mixed. Support is seen at 86.60, 86.30, 86.15, and 85.60. Resistance is viewed at 87.10, and 87.85.  GBP/USD also fell to a day's low of 1.4204 after twice failing to break strong resistance seen at 1.4240. Resistance is eyed at 1.4240, 1.4280 and 1.430. Support holds at 1.4180 and 1.4130. A break of 1.4110 would put 1.4045 under pressure and be seen as a bearish signal. Sterling was also unable to leverage good services PMI data into gains after Britain's dominant services sector expanded for the second month running in February to 51.5 from 51.0. The figures also support the consensus estimate that the BoE, which also meets on Thursday, will keep rates unchanged this week at a 38-year low of 4.0 percent.  Moreover, indications from today's PMI data show that both input prices and prices charged in the UK and E12 have fallen over the last month, which will reassure central bank members that monetary tightening to contain inflation is not a pressing concern.  Meanwhile, JPY resumed its recent rise and targeted the key 131.85 mark against the dollar today for the second time this week. Its difficult to ascribe a good fundamental reason from the strength. But traders attribute it to Monday's 5.9% rise in the Nikkei to a 6-month high of 11,450, repatriation fears and hopes that Japan may finally tackle its non-performing loan problems. Recent measures to support Japanese asset prices also gives Japan's capital-weak banks a needed (if artificial or temporary) boost ahead of mark to market fiscal year end on March 31.  Were USD/JPY to break key support at 132.00/131.80 it would have a bearish implication for the pair and would open up a downside target of 130.45. But the recent sell off may have bottomed again at the 131.80 mark, where stop loss orders are being protected. Upside capped at 133.0, 133.50 and 133.70, 134.00/10, 134.70/85 and strong resistance at 135.15. Support holds at 132.20 and 131.80.  Despite USD losses across the board on Monday, US stocks soared on hope that the US economy is on the verge of recovery based on recent affirmative economic data. The Dow skyrocketed 2.1% or 217 points to 10586 and NASDAQ rose 3.1% or 56 points to 1859. Therefore, dealers will look to see what today's services PMI data says in US. Both European figures showed modest gains after breaking back above the 50 mark into expansion in January. US non-manufacturing ISM survey is expected to break above the key 50-level to 51.0 in February from the previous 49.6, thereby indicating growth in the services sector. While this is a positive confirmation for the improvement in the US economy, reaction in FX markets is likely to be muted ahead of Thursday's monetary policy speech by Greenspan and Friday's key US labor market report.  	[IMAGE] Audio Mkt. 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