[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:   2.0%  0.15%  3.25%  4.0%  1.75-2.75%       [IMAGE] 	 [IMAGE]  Dollar Gives Back Friday's Gains, But Bull Still Stands  November 26, 7:00 AM: EUR/$..0.8817 $/JPY..124.02 GBP/$..1.4177 $/CHF..1.6625  Dollar Gives Back Friday's Gains, But Bull Still Stands by Jes Black  No Key Data Today   The dollar fell further in European trade, giving back all of last Friday's gains after it soared to new 15-week highs against the euro and yen at 87.37 cents and 124.48 respectively, as well as a new 4-month high against the pound sterling at $1.4042. EUR/USD regained key support at 87.50 followed by 88.10 and climbed to a session high of 88.32, stopping just short of last week's highs around 88.35. EUR/USD resistance stands at 88.40 followed by 88.80.  GBP/USD also regained support at 1.4120 and rose to a day's high of 1.4203 before meeting tough resistance around the 1.42 figure.  However, the correction in USD was seen as temporary as today's movement came on the back of a large buy order squeezing dollar shorts in the market. Dealers say there appears to be no demand to chase squeezes or go short USD at these levels, which should mean the dollar is likely to remain strong. Therefore, dealers still see a rally in EUR/USD towards 88.80 to be sold as the bear trend should resume this week targeting 87.20 followed by 86.75.   After earlier action, the FX market appears to have moved into a steady range ahead of the return of US dealers after the long holiday weekend. However there is no major data due today and markets will instead focus on Eurozone and US Q3 GDP figures due on Thursday and Friday as well as the Morgan Stanley Capital International index changes at the end of the week. US Q3 GDP is expected to contract by 0.8% while the Eurozone could grow by 0.1%. Important to the markets this week will be any indications contrary to the prevailing notion of the US economy recovering in the second half of 2002. This prevailing sentiment has been key to the recent rally in US equities and the dollar.  In addition, the Fed's commitment to growth is another reason the dollar has performed so well despite the near certainty of a recession. It is also explains why the Morgan Stanley Capital International index is expected to be reweighed in favor of US equities at the end of this month. According to the adjustments MSCI will make, Japan, France and Germany are likely to see a net outflow of capital, while the UK and US will be on the receiving end.  Markets will also focus on the Federal Reserve's Beige Book on Wednesday because it will give a good indication for the Fed's next interest rate policy meeting on December 11. With parts of the economy showing signs of a turnaround, the probability of further aggressive easing by the Fed has diminished. Markets have priced in only a 30% chance that the Fed will ease by 25 bp next month. Large gains in US equities have helped rein in the Fed's accommodating policy. The S?500 is up over 15% from its September lows, and as investors show an increasing appetite for risk, a huge amount of money sitting on the sidelines is waiting to get a better return than in the money market. The US is likely to remain the preferred destination for international portfolio flows, which should add to the recent momentum in the USD index, which has risen by 5.6% to its highest level since late July at 117.78, and is now less than 3% away from hitting its 15-year high reached in early July.  Meanwhile, JPY came under fresh pressure following the S&P's announcement that it may downgrade Japan's AA+ sovereign debt rating by two notches. USD/JPY rose to 124.35 but could not break key technical resistance around 124.45/50. Markets were not surprised by the news, which was expected, and sentiment was already bearish after the rating agency Fitch downgraded Japan by one notch earlier today. USD/JPY fell below 124 yean to session low of 123.95 after failing to break key technical resistance around 124.45/50. USD/JPY faces resistance 124.50 followed by the Aug 01 high of 125 and 125.25-30. Support is now seen at 124.00 followed by 123.50 with follow-up foundation at 122.75.  In other news, BoJ Governor Hayami said foreign bond buying was not an urgent issue. This could be seen as yen supportive. However, earlier in the day FinMin Shiokawa said he had not heard from the central bank about the possibility of the BoJ purchasing foreign bonds as part of its monetary policy operations. Therefore, his comment suggests that the BoJ acknowledges foreign bond buying is possible which would be yen negative, thus making today's impact on JPY a wash. Recall that JPY came under pressure last week following an article in the FT citing the US administration's acceptance of the BoJ buying US T bills.  GBP/USD also regained support at 1.4120 and rose to a day's high of 1.4203 after plunging to a 4-month low of 1.4042 on Friday. Sterling stumbled following Prime Minister Blair's speech which showed strong enthusiasm for the UK joining European Monetary Union. In the past, any reference has caused a knee jerk reaction. However, given the uncertain time frame and the need for the 5 economic criteria suggested by Treasury Minister Gordon Brown to be met, GBP recovered all of its losses. EUR/GBP also fell to a session low of 62.10.  USD/CHF fell to a session low of 1.6588 but continues to trade in a comfortable range of 1.65 to 1.67 since surging over 5 centimes two week's ago to a high of 1.6753. It will be a key week ahead for the Switzerland, with Q3 employment data due on Tuesday followed by the October KOF indicator on Friday set to show more weakness in business activity. Meanwhile, inflation data for November should show a large decline as oil prices fall worldwide.  	[IMAGE] Audio Mkt. Analysis USD on a Tear After S?warning, Ifo, Umich Survey       Articles & Ideas  Sideways Action, Then Weaker Euro Ahead   USD/JPY: The Next Level       Articles & Ideas Forex Glossary   Economic Indicators   Forex Guides   Link Library      [IMAGE] 	
		[IMAGE][IMAGE] [IMAGE][IMAGE]	
		  This e-mail is never sent unsolicited. If you wish to unsubscribe from this or any other Forexnews.com newsletters, please click here .