[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]  USD Eases Off JPY, But Hits New 6-Month High vs Euro  February 1, 7:00 AM: EUR/$..0.8605 $/JPY..133.92 GBP/$..1.4100 $/CHF..1.7165  USD Eases Off JPY, But Hits New 6-Month High vs Euro by Jes Black  At 8:30:00 AM US Jan Avg Hourly Earn. (exp 0.2%, prev 0.5%) US Jan Payroll Employ. (exp -27k, prev -124k) US Jan Unemployment (exp 5.9%, prev 5.8%) At 9:45:00 AM US Jan Univ of Michigan Sent. Final  (exp 94.3, prev 88.8) At 10:00 AM US Jan PMI (exp 49.4, prev 48.2)  USD/JPY maintained above 133.80 in European trade as the dollar whipsawed against the European majors, first higher then back again. The dollar retraced part of an overnight 2.5 yen surge to a fresh 40-month high of 1356.15, but found support above 133.60, which marks the 61.8% retracement of the rally. Meanwhile, favorable European manufacturing data helped the euro off a fresh 6-month low of 85.64 but trade steadied soon afterwards as dealers are now looking to the final leg of a key US data week for direction. Markets will watch to see if the US economy can retain its positive outlook ahead of the January US employment report, PMI data and the University of Michigan consumer sentiment survey.  Traders are expecting further improvement in today's data after US economic indicators have turned sharply positive. Most notably this week was the astonishing 0.2% rise in 4Q01 GDP. While the market was looking for a decline of around 1%, it again underestimated the ability of US consumers to shop -- even in a recession. In fact, the incredible 5.4% annualized rise in consumer was a recession spending record, just edging out the 5.1% rise in 2Q60.  Given the tumultuous week on Wall Street, dealers will still look to movements there for direction. Today's futures are down 15 points on the Dow and 4 on the Nasdaq. Today's earnings announcements are light, with only a handful of companies reporting. Therefore, the market will react more to today's economic data.  First on today's list is the jobs report for January which is expected to shed a mere 27k after last months 124k loss. This would be a marked improvement reflecting the improving trend in jobless claims in recent weeks.   Then comes the final revision to the University of Michigan's confidence survey. The headline figure is expected to stay steady at 94.3 in January, up from the previous 88.8. However, it is not anticipated to generate waves in FX markets, as forecasts call for the final January reading to remain virtually unchanged at 94.3.   More important will be the ISM (formerly NAPM) Purchasing Managers Index as it looks poised to jump to 49.4 in January from the previous 48.2, possibly even breaching the key 50-level which marks expansion/contraction.  On Thursday, the Chicago PMI rose to 45.1 in January from the previous 41.5. Regional manufacturing was boosted as the production component broke above the key 50-level for the first time since December 2000 into expansionary territory to 50.4 in January. Nevertheless, this month's reading marked the 18th month the manufacturing sector has been in contraction.   This compared to the relatively light manufacturing recession going on in Europe. Today's PMI figures also showed a good recovery with UK PMI rising to 46.2 in January from 45.2 the eleventh consecutive decline. Eurozone PMI also rose to a high of 46.2 in January from 44.1. Although the figure still marked a tenth month of contraction, markets were optimistic that the euro area would follow the US out of a recession.   Meanwhile, traders will also be monitoring this week's World Economic Forum in New York and next week's G7 meeting in Toronto for any dollar policy rhetoric in light of the recent complaints about the strong dollar by manufacturers.  However, the dollar is not likely to come under pressure after yesterday's remarks by Treasury Secretary O'Neill that he had no sympathy for complaints by US manufacturers about the strong dollar because good companies do not "live and die" by exchange rates. Furthermore, he said that the current account balance is an "artifact", or an outdated way of looking at the economy, countering arguments that the dollar is overvalued because of the imbalance in the US current account.  EUR/USD rose to a day's high of 86-cents following the better than expected PMI data. But the downside risks have increased after the pair breached former support at 85.75 to hit a new 6-month low of 85.65. The euro was not helped by the jump in January euro area inflation to 2.5% as expected. Now, the pair risks closing below support at 86 cents after failing to hold onto gains above 86.30 overnight. Moreover, the single currency would need to regain the 86.80/90 mark to really improve its outlook. Resistance is viewed at 86.80, and the key 87.40/50 level which marks the 61.8% Fibonacci retracement of the move from 82.25 to 95.95. A break of 85.60/70 is seen calling upon support at 85.0 and 84.50, which marks the long-term trendline support extending from its 82.25 lows.   GBP/USD fell to a day's low of 1.4063, after sterling dropped from a day's high of 60.72 pence to the euro to a 61 pence low. The rise in EUR/GBP put sterling under pressure to below Thursday's low of $1.4085. Support is seen at this week's 6-month lows around 1.4040. Resistance at 1.4183, which marks the 38.2% Fibonacci retracement of the 1.4418-1.4038 move, has held so far. Barring a break of this resistance, renewed weakness could prevail.  USD/CHF rose to a 6-month high of 1.7232 before paring gains back to support around 1.7150. Follow up support is seen at 1.7060 and 1.6945, the 50% retracement of the 1.8220 to 1.5770 move. Also keeping pressure on the franc was the Swiss KoF indicator which fell to -1.37 in December from -1.28, marking a worsening of conditions, not a turnaround as many had hoped. Therefore, given the recent bullish data and positive outlook by the Fed, USD/CHF should remain well supported.  	[IMAGE] Audio Mkt. Analysis Yen Battered Across the Board       Articles & Ideas  USD/JPY: ONeill, Koizumi and January Effect    Fed Moves On, Dollar Moves Up       Articles & Ideas Forex Glossary   Economic Indicators   Forex Guides   Link Library      [IMAGE] 	
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