[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]  FX Trade Subdued, Markets Look To Greenspan January 11, 7:00 AM: EUR/$..0.8919 $/JPY..132.09 GBP/$..1.4434 $/CHF..1.6586  FX Trade Subdued, Markets Look To Greenspan by Jes Black  At 8:30:00 AM US Dec PPI y/y (exp -1.6%, prev -1.1%) US Dec PPI m/m (exp -0.2%, prev -0.6%)  US Dec PPI ex food energy (exp 0.9%, prev 0.9%) Event: At 1:45 PM Fed Chairman Greenspan speech  FX markets were relatively quiet today as the majors kept within yesterday's ranges. European bourses were mixed and the lack of economic data kept traders away from taking decisive positions ahead of the weekend. Most subdued was EUR/USD, which continues to move within a tight range of 89.10 to 89.30. Meanwhile, markets listened to more remarks from Japanese officials that the yen's fall was nearing its limit. JPY rose to a day's high of 131.88 vs USD and 117.67 vs EUR, but failed to make a decisive break past the key levels of 131.50 and 117.50 which would herald more corrective yen buying.  Overnight, Japanese Trade Minister Hiranuma said that with the dollar approaching 135 yen, the pair was approaching is limit. On Thursday, Ex-Japanese Minister of Finance Sakakibara, aka Mr. Yen, also warned of possible Japanese intervention if the dollar rises above the psychological level of 140 yen. However, said he still sees the yen possibly falling to 150-160 per dollar towards year end.   The recent change in JPY sentiment from talking it lower to trying to stabilize its fall has two motivations. First, the Japanese dislike sharp falls in their currency and prefer gradual moves, which appear more stable. In addition to the yen's 10% decline over the past 2 months, PM Koizumi is currently on a 7-day tour around Southeast Asia, which began on Wednesday. Therefore, the political implications of a weak yen divisive, with ASEAN economic ministers worried that that the weakening in the yen could create malaise in other Asian markets. Therefore, for political reasons Japanese officials are now likely to remain quiet until the PM returns.  This temporary shift in sentiment has caused a bout of profit taking and a period of consolidation would not be unusual following the yen's steep fall. But any correction in USD/JPY would likely hold around 130-132 dealers say before the next push higher. EUR/JPY fell to a day's low of 117.76 but has importantly held above Wednesday's low of 117.50. Only a break of this mark would target last week's lows around 116.90 and the 2-week low of 116.50. Upside is seen capped at 118.75 and last week's 2-year high of 119.71.  CHF broke out of a tight 20 pip trading range against the dollar and rose to a day's high of 1.6578 following hawkish remarks from an Indian army chief over the prospect of war with Pakistan. EUR/CHF also fell to a low of 1.4785 from highs around 1.4840.  GBP/USD rose to a session high of 1.4452, but again failed to maintain gains above the key 1.4440 level. Sterling, like the euro, has continued to trade in a tight range against the dollar this week, thus reflecting the market's indecision about the rosy prospects for the US economy. Overnight, GBP fell from a high of 1.4460 to a low of 1.4370 despite strengthening against the dollar on Thursday after the Bank of England decided, as analysts expected, to leave interest rates unchanged at a 37-year low of 4.0% because of signs of robust consumer and housing spending. The BoE's decision underlines the better performance of the UK economy relative to other G7 nations. Nonetheless, the pound continues to be undermined by market speculation about the UK joining the EMU. Support holds at 1.4370, 1.4340 and 1.4320. Resistance is seen at 1.4465, 1.450 and 1.4550. Against the euro, resistance at 61.70 held today, which should keep sterling's gains in check.  Meanwhile, EUR/USD price action was subdued as it hovered in a tight 20 pip range of 89.11 to 89.31. The pair continues to move within a channel from 88.70 to 89.50 as it hovers around the key 89.10 level, which marks the 50% Fibonacci retracement of the move from 82.25 to 95.96. This level is significant in that it reflects an equilibrium in supply and demand condition between euro and dollar. Overnight, the pair briefly tested resistance at 89.35, but was rejected. Now, failure to maintain above 89.10/20 would probably call for a test lower to 88.70 followed by 87.60, which marks the 61.8% Fibonacci retracement level of the same move. Moves higher are not seen by the market as indicating strength given the euro's difficulty to remain above 90-cents. But given the mixed data from the Euro area and the US, investors are seen waiting on the sidelines ahead of the latest round of earnings reports from the US for better direction.  Meanwhile, markets will be looking for signs of economic recovery in the US and more gains on Wall Street after two days of diverging finishes. On Thursday, the Dow fell 0.2% while the Nasdaq rose 0.1% ahead of next week's corporate earnings reports which overshadowed better-than-expected retail and economic data. Dealers will watch to see if U.S. markets are getting ahead of themselves in anticipating a U.S. recovery, meaning that share prices may be overvalued.  Markets will pay careful attention to Fed Chairman Greenspan's speech today for any mention about the US outlook, as it will be his first speech on the economy since last October.   Today's US indicator is PPI, which is forecasted to rise to -0.2% in December from the previous -0.6% but remain below zero for the third straight month as energy and food prices continue to decline. Core PPI is projected to edge down to 0.1% in December from 0.2% in November, in a reflection of how overall inflationary pressures remain mild.     	[IMAGE] Audio Mkt. Analysis BoE inaction Lifts GBP, Comments Hurt CHF        Articles & Ideas  A Weak Yen Is the Solution for Now    What's Next For the Euro?       Articles & Ideas Forex Glossary   Economic Indicators   Forex Guides   Link Library      [IMAGE]  	
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